Russia Asks India To Use Dirhams For Its Oil Payments

According to three sources and a document seen by Reuters, Russia is requesting payment in United Arab Emirates dirhams for oil supplies to some Indian customers, as Moscow moves away from the U.S. dollar to insulate itself from the effects of Western sanctions, Nidhi Verman reported.

Photo Insert: For the second month in a row, Russia overtook Saudi Arabia as India's second largest oil supplier after Iraq in June.

As a result of Russia's invasion of Ukraine in late February, the United States and its allies have imposed a number of sanctions on the country. For one refinery, the charge is estimated in dollars, but payment is demanded in dirhams, according to an invoice obtained by Reuters.

Rosneft, the Russian oil giant, is supplying crude to India, its second-largest oil importer after China, through trading entities such as Everest Energy and Coral Energy.

Russian crude prices have fallen to record lows as a result of Western sanctions, which have pushed many oil importers to boycott Moscow.

Indian refineries, who had previously avoided buying Russian oil because of the high freight expenses, now have the option to do so at substantial discounts to Brent and other Middle Eastern staples, thanks to the current price decline.

For the second month in a row, Russia overtook Saudi Arabia as India's second largest oil supplier after Iraq in June.

According to the sources, at least two Indian refiners have already made some payments in dirhams, with more expected to do so in the coming days. Mashreq Bank, Gazprombank's correspondent bank in Dubai, was included as a payment option on the invoice.

Some in the West believe the UAE's position is untenable and that it is siding with Russia, but the UAE has not placed sanctions on Moscow in order to retain its so-called neutral posture. The payments could exacerbate this frustration.

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