Private India Refiners ‘Now Paying for Russian Oil in Yuan’

More Indian oil refiners have begun paying for oil imports from Russia with China’s yuan, it has emerged, in another blow to the dominant US dollar.

At least two of India’s three private refiners have paid for some Russian imports in yuan, sources have claimed, as Western sanctions force Moscow and its customers to find alternatives to the dollar for settling payments.

Indian Oil Corp, the country’s biggest buyer of Russian crude oil, in June reportedly became the first state refiner to pay for some Russian purchases in yuan.

The US dollar has long been the main global oil currency, including for purchases by India, but now the yuan is playing an increasingly important role in Russia’s financial system because Moscow has been frozen out of the dollar and euro financial networks by international sanctions.

China has also shifted to the yuan for most of its energy imports from Russia, which overtook Saudi Arabia to become China’s top crude supplier in the first quarter this year.

It could not immediately be determined how much Russian oil Indian refiners have bought with yuan, although Indian Oil has paid in yuan for multiple cargoes, sources said.

The rise in yuan payments has given a boost to Beijing’s efforts to internationalise its currency, with Chinese banks promoting its use specifically for Russian oil trade.