Russia is looking to accept payments in UAE dirhams for oil exports to some Indian customers, as the latest efforts by Moscow to bypass western sanctions and to move away from the US dollar, reports Reuters today, citing three sources.
An invoice seen by the news agency purportedly shows the bill for supplying oil to one refiner is calculated in dollars, while payment is requested in dirhams. Russian oil major Rosneft is pushing crude through trading firms including Everest Energy and Coral Energy into India, now its second biggest oil buyer after China, the report said.
One payment in dirhams was made out to Gazprombank via Mashreq Bank, its corresponding bank in Dubai and at least two Indian refiners are said to have already settled some transactions in dirhams. The dirham is pegged to the dollar, thus ensuring the funds are in the world’s reserve currency.
In May Russia became India’s second-largest oil supplier after Iraq, replacing Saudi Arabia. Previously India avoided buying Russian oil due to the high freight costs involved. However following Moscow’s on-going military operations in Ukraine and the backlash from the west in the form of sanctions, India ignored calls to cut ties with Russia and insisted it needed extra oil supplies to avoid a fuel price surge. Russia, for its part, offered discounts to encourage oil buyers and has also demanded that “unfriendly” countries, particularly in the EU must pay for Russian energy in rubles, at no discount.
In March, Moscow and New Delhi discussed reviving a Cold War era currency pact to evade sanctions in the form of a rupee-ruble ledger which would enable the countries to business without the use of US dollars.
The Reserve Bank of India last week introduced a new mechanism for international trade settlements in rupees.