Russian Oil Firms Face Payment Delays Amid US Sanctions

Russian oil firms face delays of up to several months to be paid for crude and fuel as banks in China, Turkey and the UAE boost compliance requirements, eight sources told Reuters.

• Banks started to ask their clients to provide written guarantees that no person or entity from the US Special Designated Nationals list is involved in a deal or is a beneficiary of a payment.
• The US Treasury Department in its executive order in December 2023 warned it could apply sanctions for the evasion of the Russian oil price cap on foreign banks.
• In the UAE, First Abu Dhabi Bank and Dubai Islamic Bank have suspended several accounts linked to the trading of Russian goods, two sources said.
• UAE's Mashreq bank, Turkey's Ziraat and Vakifbank and Chinese banks ICBC and Bank of China still process payments but take weeks or months to process them, four sources said.
• In late February, UAE banks had to rise payment scrutiny as they were asked to provide data to the US correspondent banks and the US Treasury if they have transactions that go to China on behalf of a Russian entity, one source said.
• "This meant delays in processing payments to Russia," the source added.
• "It has become tough and not even for the dollar transactions. Sometimes it takes weeks for a direct yuan-rouble transaction to be executed," one of the traders said.