Reuters: Indian refineries buy Russian oil for UAE dirhams

Indian refiners have begun paying for most of the Russian oil they buy through traders from Dubai in UAE dirhams instead of US dollars. About it informs Reuters, citing four sources.

New Delhi, recalls Reuters, does not recognize anti-Russian sanctions imposed by Western countries, and oil purchases do not violate the restrictions imposed. However, banks and financial institutions are cautious about clearing payments so as not to “unwittingly violate many measures,” the agency notes.

After the price ceiling for Russian oil was set, traders began to look for alternative ways to pay for supplies, but attempts by Indian oil refiners to pay in dirhams through Dubai banks were unsuccessful, writes Reuters. However, now, according to agency sources, the State Bank of India (SBI) is settling such payments in UAE currency. The refineries are said to buy Russian oil on such terms as to minimize the number of risks during its transportation, and the cost of shipment does not exceed the price ceiling. Indian companies buy oil from traders in Dubai, including Everest Energy and Litasco, a division of Lukoil.

Earlier, Indian Oil Minister Pankaj Jain said that the country’s companies have no problems with paying for Russian oil, since the West’s actions do not affect the mechanism of trade settlements, Reuters adds.

Last fall, the Indian Express reported that trade between the two countries rose largely on the back of a sharp increase in India’s imports of Russian oil. India used to import less than 1% of its total crude oil from Russia, but now it is about 22% of its needs. Indian Express noted that in October Russia became the largest supplier of oil to India, overtaking Iraq and Saudi Arabia.

In December, Russian Deputy Prime Minister Alexander Novak greeted the decision of the Indian government not to support the ceiling imposed by the West on Russian oil prices.

The trade turnover between Russia and India in 2021 increased by 46.5% and amounted to over $13.5 billion. In the period from January to September 2022, the trade turnover reached $20.4 billion, exceeding the figure for 2021. According to the results of eight months, the supply of Russian oil to the Indian market increased to 16.35 million tons. In early November last year, the Indian government also allowed international trade settlements in Indian rupees in order to promote exports. In September, The Economic Times reported that India would start trading with Russia in rupees as the Indian State Bank (SBI) agreed to facilitate trade deals with Russian partners in the national currency.