Yuan or Rupees: India’s Russian Oil Payment Predicament
The Indian government's reluctance to allow state-controlled refiners to use the Chinese yuan to pay for Russian oil imports has led to payment delays for seven shipments.
This dispute hasn’t disrupted oil deliveries, and Russian companies like Rosneft continue to supply crude to Indian refiners. However, Indian refiners are exploring alternative payment methods.
India recently became the top importer of Russian seaborne oil, benefiting from discounted deals after some Western nations suspended imports due to the Ukraine conflict.
Refiners face challenges due to a price cap on Russian oil imposed by the US and EU, forcing them to use alternatives such as Emirati dirhams for shipments exceeding the cap.
Although Indian refiners started using the yuan for some Russian oil payments, the Indian government is uncomfortable with this approach, leading to pending payments for seven shipments. It’s unclear if the government issued a formal directive against using the yuan, but their disapproval is evident.
The conversion of rupees to yuan incurs additional costs, making it less favorable for refiners. Russian suppliers have insisted on yuan payments, but there have been no comments from Russian companies like Rosneft and Gazprom.
Indian Oil Corp (IOC) and other state refiners have used yuan alongside other currencies for Russian oil payments. State refiners like Bharat Petroleum Corp (BPCL) and Hindustan Petroleum (HPCL) have also been asked to make payments in yuan.
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While Indian state refiners would prefer to use rupees, Russia is less inclined due to the trade balance favoring Moscow. Some in India view the use of the yuan as favoring China, especially amid lingering tensions following a 2020 border clash.
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.
