Reuters: Indian companies switched to paying for Russian oil in Emirati dirhams
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To reduce the risk of violating Western sanctions, Indian refineries have begun paying for most of Russian oil supplies in the national currency of the UAE, the dirham. This is reported Reuters with reference to the transaction data provided by the sources.
According to the agency, the sanctions imposed by Western countries on Russia are not recognized by India, therefore, when buying Russian oil, their conditions cannot be violated. However, Indian banks and financial institutions are cautious about clearing payments so as not to violate other restrictive measures taken against Russia.
Previous attempts by Indian oil refiners to pay traders for Russian oil in dirhams through Dubai banks were unsuccessful, forcing them to return to the US currency, Reuters writes. Now, however, the State Bank of India has begun making payments in dirhams, agency sources said. Indian refiners mainly buy Russian oil from traders in Dubai, including Everest Energy and Litasco, a division of the Russian oil company Lukoil.
That Russia wants some Indian oil buyers to pay for it in dirhams, Reuters wrote in July 2022. August 10 agency reportedthat Indian companies began to pay in yuan and dirhams for Russian coal as well.
On December 5, an embargo on Russian oil supplies to the European Union came into force. Also from that day on, a cap on energy prices of $60 per barrel was introduced by the EU countries, the G7 and Australia. The price caps allow non-EU countries to import oil from Russia, but prohibit the provision of insurance, ships, and any services to transport sea shipments of Russian oil unless contracts for its sale provide for a price cap of $60 per barrel.
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