Indian State Refineries Reluctant to Buy Russian Oil in Yuan

The Indian government has been reluctant to allow its refineries to buy Russian oil using Chinese yuan which is holding up payments for seven cargoes at present according to Reuters sources.

• The reluctance to pay via yuan has not delayed cargoes so far but Russia is pushing to use other currencies to try and avoid using the likes of the US dollar.
• Reuters reports in July said that Indian refiners were using yuan for some oil purchases but mainly using dollar and dirhams.
• On paying in yuan, an Indian ministry official said "It is not banned and if a private firm has yuan to settle its trade, the government will not stop it, but it will neither encourage nor facilitate such trade."
• Reuters refining sources said Indian traders have been ready to strike deals in dirhams, but Russian sellers have held out for yuan.
• Private Indian refiners have continued to pay in yuan and other currencies for Russian oil imports based on the reports.
• Yuan trades are also said to result in increased transactional costs because of multiple conversions.