Indian Refiners Embrace Yuan for Russian Crude Imports
Indian refiners are diversifying their currency usage for purchasing Russian crude imports due to ongoing Western sanctions and concerns over potential secondary sanctions.
Unlike the West, India does not officially endorse the measures against Russia’s actions in Ukraine. However, Indian banks are cautious about using US dollars for Russian imports to mitigate the risk of secondary sanctions.
In a recent development, Indian Oil became the first state refiner to pay for Russian crude in Chinese yuan, with at least two private refiners following suit. Previously, India had discouraged the use of yuan in Russian transactions due to geopolitical tensions with Beijing, but whether this stance has changed remains uncertain.
According to Bloomberg, state refiners Bharat Petroleum and Hindustan Petroleum are also contemplating adopting the yuan as an alternative currency. This shift away from the US dollar, the predominant currency in international oil transactions, is driven by concerns about currency risks. Indian importers have sought alternative options to mitigate these risks.
Although India has attempted to use the rupee for oil purchases, these efforts have largely been unsuccessful due to the inability to convert the substantial rupee stockpile held by Moscow. Furthermore, the redirection of Moscow’s energy exports to new markets at discounted prices has benefited countries like India and China.
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In June, Russian imports into India reached a record high of 2.2 million barrels per day. This growing acceptance of the yuan as a payment currency is advantageous for Beijing, which has actively promoted its use in cross-border trade agreements as part of its gradual effort to reduce the dominance of the US dollar.
It has also provided some relief to Russia, which relies on the yuan to circumvent Western measures. Apart from China, Pakistan also paid for Moscow crude in yuan last month.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
