Indian Firm Switches To Use Chinese Yuan In Settlement Of Russian Oil: Report

Indian Firm Switches To Use Chinese Yuan In Settlement Of Russian Oil: Report

India’s state-owned oil company has begun paying Russian energy bills in Chinese yuan, Reuters reported on October 7, as Washington imposed high tariffs on New Delhi, citing its energy partnership with Moscow.

“Indian Oil Corporation recently paid for two to three cargoes of Russian crude in Chinese yuan,” an unnamed source said, according to British media.

“In the meantime, traders have had to exchange dirhams or dollars for yuan to get rubles to pay Russian producers, but now they’re trying to get rid of this complicated and costly step,” a trade source said.
Other officials added, “Traders are trying to price Russian oil in dollar terms to comply with the EU’s price cap rules and then settle it in the corresponding yuan.” “Since some traders do not accept other currencies, the expansion of the yuan’s settlement will make it easier for Indian state-owned refiners to secure Russian oil,” he added.

Recently, U.S. President Donald Trump imposed strong sanctions on India for energy cooperation with Russia.

In late August, President Trump signed an executive order imposing an additional 25% tariff on India that purchased Russian oil. The tariff is on top of the 25% tariff by country that has already been in effect since August 7, with a total tax rate of 50% being one of the highest levels ever imposed by the United States.

Russia is India’s fourth trading partner, while India is Russia’s second. India is also one of the main buyers of Russian energy.

New Delhi has also been improving its relations with Beijing recently. Last month, Indian Prime Minister Narendra Modi visited China for the first time in seven years.

“The resolution of potential India-China border disputes could be a significant turning point in Asia, easing decades of hostility while weakening Washington’s influence on New Delhi,” MK Badrakumar said in an article published in “The Cradle” in August.

India’s start to settle Russian oil in Chinese yuan is another step in the de-dollarization trend of 脫. This is also a move that BRICS+ emerging economies are pushing to circumvent Western sanctions.

In July, President Trump threatened to impose additional tariffs on all countries linked to the BRICS.
“Any country that aligns with the BRICS anti-U.S. policy will be subject to an additional 10% tariff,” he said.
-The Cradle