Indian refiners paying Russia oil invoices in dirhams
RUSSIA is seeking payment in United Arab Emirates (UAE) dirhams for oil exports to some Indian customers, three sources said and a document showed, as Moscow moves away from the US dollar to insulate itself from the effects of Western sanctions.
Russia has been hit by a slew of sanctions from the US and its allies over its invasion of Ukraine in late February, which it terms a “special military operation”.
The Russian oil major Rosneft is pushing crude through trading firms including Everest Energy
and Coral Energy into India, which is now its second-biggest oil buyer after China.
Western sanctions have prompted many oil importers to shun Moscow, pushing spot prices for Russian crude to record discounts against other grades.
That provided Indian refiners, who rarely bought Russian oil due to high freight costs, a chance to snap up exports at hefty discounts to Brent and Middle East staples.
Moscow replaced Saudi Arabia as the second biggest oil supplier to India after Iraq for the second month in a row in June.
An invoice seen by Reuters shows the bill for supplying oil to one refiner is calculated in dollars while payment is requested in dirhams. At least two Indian refiners have already settled some payments in dirhams, the sources said, adding more would be making such payments.
The invoice showed payments to be made to Gazprombank via Mashreq Bank, its correspondent bank in Dubai.
The UAE, seeking to maintain what it says is a neutral position, has not imposed sanctions on Moscow, and the payments could add to the frustration of some in the West, who privately say the UAE’s position is untenable and siding with Russia.
Rosneft, Coral Energy and Everest Energy did not respond to emails seeking comment.
Dubai, the Gulf’s financial and business centre, has emerged as a refuge for Russian wealth.
India’s central bank last week introduced a new mechanism for international trade settlements in rupees, which experts see as a way to promote trade with countries under Western sanctions, such as Russia and Iran.