Indian refiners have started paying for most of the Russian oil they buy through Dubai-based trading companies in UAE dirhams rather than US dollars, four informed sources said.
While India does not recognize Western sanctions against Moscow and Russia’s oil purchases still do not violate them, banks and financial institutions are careful to cover payments so they don’t inadvertently fall for the many measures imposed on Russia to invade. Ukraine.
Indian traders and refiners are concerned about the inability to settle dollar transactions, especially if Russian oil prices break the ceiling set by the seven countries and Australia in December.
This has led them to look into alternative payment methods that could also help Russia try to de-dollarize its economy in response to Western sanctions.
Previous attempts by Indian steelmakers to pay commercial companies for Russian oil in dirhams through Dubai banks have failed, forcing them to revert to the US currency.
But sources told Reuters that the State Bank of India, the country’s biggest, is now settling payments in dirhams and providing details of previously undisclosed transactions.
The Indian bank, which has branches abroad including in the United States, did not respond to a request for comment.
The price cap imposed by the Group of Seven prohibits Western companies, such as the insurance companies and shipping companies that underpin much of global trade, from participating in the Russian crude oil trade if the purchase price exceeds $60 a barrel. Loading in Russia. This continues to happen even as oil goes to countries like China and India, which do not recognize this ceiling.
Payments in dirhams also came as the State Bank of India required refiners seeking dollar payments to provide details of oil, freight and insurance costs, allowing it to vet transactions and avoid price defaults.
“The State Bank of India is very cautious in its approach,” one of the sources said, despite the fact that New Delhi does not adhere to the rate cap mechanism and Western insurance and freight are not used for delivery.
Indian refiners generally buy Russian crude oil at a price that includes delivery to India.
Most Indian refiners buy Russian crude from Dubai-based trading companies such as Everest Energy and Litasco, a unit of Russian oil giant Lukoil.
Source: EuroNews
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