Traders have reportedly requested that state-owned companies in India pay for crude in the Chinese currency
State-owned Indian Oil Corp, the country’s largest refiner, has made payments in yuan for a few shipments of Russian oil, Reuters reported on Wednesday.
The payments were made after traders supplying Russian oil started requesting Indian state-owned refiners make payments in the Chinese currency, the news agency said, citing sources.
Payments from India are usually made either in US dollars or UAE dirhams to traders, who then convert them into Russian rubles to pay oil producers. Yuan payments help eliminate the extra costly step, a trader told Reuters.
The yuan has become a major foreign currency in Russia, which is one its largest offshore trading centers.
Traders price Russian oil in dollars to ensure adherence to the EU’s price cap, but are seeking the equivalent Yuan payment, the Reuters report added.
Since 2022, India has significantly increased oil imports from Russia, while also becoming a key supplier of refined fuels to Europe. Private Indian companies have been buying Russian oil at discounted rates.
India’s oil purchases from Russia have drawn the ire of US President Donald Trump, who imposed 25% punitive tariffs on most imports from the South Asian country in August.
Indian state refiners made some payments for Russian oil in yuan in 2023, but this was stopped during a period of heightened tensions with Beijing. Private refiners have continued to pay in the Chinese currency, according to the Reuters report.
New Delhi and Beijing have been making efforts to repair relations, which deteriorated following a border clash in 2020 that claimed lives on both sides.
The warming of ties began following a meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping in October 2024, held on the sidelines of the BRICS summit in Kazan, Russia.
Last week, the neighboring countries announced the resumption of direct flights, which were suspended at the beginning of the outbreak of Covid-19 in 2020.
The payments in yuan for Russian oil by Indian Oil Corp are another indication of warming ties between New Delhi and Beijing.
