Yuan Makes Inroads: Indian Refiners Begin Paying in Chinese Currency for Russian Oil
Indian Refiners Adopt Yuan Payments for Russian Oil Imports Amid Shifting Sanctions
Indian refiners have begun using Chinese yuan to pay for some oil imports from Russia, as international sanctions against Moscow push for alternative settlement currencies. Traditionally, the US dollar has dominated global oil transactions, including those by India. However, with Russia facing restricted access to the dollar and euro financial networks, the yuan is gaining significance in its financial system.
China has also shifted to yuan payments for most of its energy imports from Russia. Indian Oil Corp, the country’s largest buyer of Russian crude, became the first state refiner to make yuan payments for Russian purchases, and at least two private refiners have followed suit. The rise in yuan payments supports Beijing’s efforts to internationalize its currency. Indian refiners have mostly procured Russian crude from Dubai-based traders and Russian oil companies since the imposition of sanctions on Moscow.
While Indian imports of Russian oil do not violate Western sanctions, Indian banks remain cautious about clearing payments for such imports. State Bank of India rejected a planned dollar payment for a cargo delivered by Rosneft, prompting Indian Oil Corp to settle the payment in yuan via ICICI Bank. Bharat Petroleum Corp Ltd is also considering yuan payments for Russian oil.
