【India Begins Using RMB to Settle Russian Oil Purchases】
As Sino-Indian relations gradually ease, Russian oil traders have started demanding that India's state-run refineries settle oil purchases in RMB, replacing the previously common use of USD or UAE Dirham. According to sources on October 8, this change helps streamline transactions and enables smooth energy trade between Russia and India.
After the outbreak of the Ukraine-Russia conflict in 2022, stringent Western sanctions forced international energy trade with Russia to bypass the USD settlement system, leading to increased use of RMB and UAE Dirham as alternative currencies. However, since only RMB can be directly exchanged for Rubles, using USD or UAE Dirham involves additional transaction costs, and using USD even adds risk costs. Switching to RMB settlements can eliminate these intermediate steps, improving transaction efficiency. It is reported that although the price of Russian oil is still quoted in USD, payments can be made in equivalent RMB.
However, this situation presents a dilemma for India. India has been purchasing discounted Russian oil in large quantities, but due to past tense Sino-Indian relations, state-run Indian refineries used Dirham for payments, while private refineries have continued to use RMB in secret. However, because some Russian suppliers are unwilling to accept other currencies, this has caused significant difficulties for India in making payments.
Now, with the improvement in Sino-Indian relations, India has begun using RMB for payments. According to Reuters, the largest refining company in India, Indian Oil Corporation, has recently paid for two to three batches of Russian crude oil in RMB.
Original article: www.toutiao.com/article/1845489447493640/
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