【By Observer News, Qi Qian】

According to a Reuters exclusive report on October 7, Russian oil traders have recently started to ask Indian state-owned refineries to pay in Renminbi (RMB). Sources said that after the improvement of Sino-Indian relations, Russian oil sellers view this as an opportunity to simplify transactions with Indian buyers.

A person familiar with India's company's Russian oil procurement said that recently, India's largest refiner, Indian Oil Corporation, has already paid for two to three batches of Russian oil shipments in RMB. Indian Oil Corporation did not immediately respond to requests for comment.

Source told Reuters that Russian oil traders previously allowed buyers to pay in RMB, Dirham and USD, but later they needed to convert Dirham or USD payments into RMB, as only RMB can be directly exchanged for Rubles. Now, Russian oil traders are seeking to simplify the process and require buyers to use RMB directly.

The person said that traders are pricing Russian oil in USD to ensure compliance with the EU "price cap" and seek equivalent RMB payments.

This person further explained that using RMB for payments will expand the supply of Russian oil to Indian state-owned refineries, as some traders in Russia do not accept other currencies.

After the Ukraine-Russia conflict, Western sanctions against Russia, but this move accelerated Russia's de-dollarization process, starting to use more RMB, UAE Dirham and other alternative currencies for oil trade settlements.

Last July, Vladimir Chistyakhi, First Vice Chairman of the Russian Central Bank, stated that the Russian Central Bank would "do everything possible" to ensure that RMB continues to be used for settlements and investments in Russia, and pledged to explore relevant mechanisms and approaches.

Reuters said that in 2023, Indian Oil Corporation had used RMB to pay for part of Russian oil, but stopped this practice after the tension in Sino-Indian relations. However, private Indian refineries continued to use RMB.

Photo of Indian Refineries, Indian Media

After the outbreak of the Ukraine-Russia conflict, Western countries imposed transaction bans on Russian oil trading companies, lowered the price ceiling for Russian crude oil, causing the price of Russian oil to drop. This led India, which relies on imported oil by up to 90%, to significantly increase its purchases of Russian oil, thereby reducing energy bills.

Reuters reported that currently, India has become the largest importer of discounted Russian seaborne oil. Data shows that Russia has become India's main oil supplier, accounting for about 35% of India's total supply, while this proportion was less than 1% before.

However, the Trump administration failed to mediate the Ukraine-Russia conflict and turned its attention to India, pressuring India to stop buying Russian oil.

President Trump announced in August that additional tariffs of 25% would be imposed on Indian goods, raising the total tariff level to 50%. This additional tariff measure will take effect on August 28 local time. Trump said this was to "punish" India for continuing to purchase Russian oil. U.S. government officials have also been pressuring India, making baseless accusations against it.

In recent times, the United States has also tried to act jointly with G7 and EU countries to urge allies to impose taxes on India.

Facing the trade pressure from Trump, the Indian government has taken a firm stance and increased interactions with Russia, China, Brazil and other countries.

On September 21, Indian Minister of Commerce and Industry Piyush Goyal reiterated that India will continue to buy oil from Russia unless the U.S. provides an alternative at the same price. Goyal called the energy issue one of India's four non-negotiable red lines. He also pointed out that it is wrong to say India is helping Russia in the war and criticized the double standards of the West: the U.S. can spend more money to buy oil, and the EU can do so too, but India doesn't have enough money to buy expensive oil. He believes that the U.S. and Europe repeatedly bring up the issue of India importing Russian oil, "is hypocritical, and this hypocrisy must end."

This article is an exclusive article by Observer News. Unauthorized reproduction is prohibited.

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