Indian refiners are now using Emirati dirhams instead of US dollars to pay for most of the Russian oil they purchase via traders based in the United Arab Emirates, Reuters reported last week, citing sources familiar with the matter.
The Indian authorities have not supported the measures against Russia adopted by the G7 in response to the conflict in Ukraine. The steps are aimed at cutting Moscow’s energy revenues.
A $60-per-barrel price cap on Russian seaborne oil exports was introduced by the EU, G7 countries, and Australia on December 5. The mechanism prohibits Western companies from providing insurance and other services to shippers of Russian oil unless the cargo is purchased at or below the set price.
A similar measure targeting petroleum exports came into force on February 5. It sets the price of refined petroleum products imported from Russia at $100 per barrel for diesel and $45 per barrel for fuel oil.
Though New Delhi decided not to take part in the restrictions, Indian banks and financial institutions remain cautious about clearing payments so as not to unintentionally fall foul of the other measures introduced against Russia.
Previous attempts to pay traders for Russian crude in dirhams through Dubai banks reportedly failed, forcing Indian refiners to switch back to the US currency. The State Bank of India, the country’s top bank, is now clearing the dirham payments, the sources told the news agency, disclosing some details of the transactions.
Indian refiners reportedly make most of their purchases of Russian crude from Dubai-based traders, including Everest Energy and Litasco, a unit of Russian oil major Lukoil.
In July of last year, media reports emerged that Russia expected some Indian buyers to pay for crude in dirhams. Later, Indian refineries reportedly turned to the yuan and dirhams for Russian coal as well.
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