India’s reluctance to use Chinese yuan to buy Russian oil holding up cargo payments

• Two sources said India’s settlement in yuan increases their costs, as rupees first need to be converted to Hong Kong dollars and then yuan
• India emerged as the top importer of Russian oil this year, after some western nations suspended imports from Moscow over its invasion of Ukraine

The Indian government’s discomfort over letting state-controlled refiners pay for Russian oil imports with Chinese currency has held up the payment for at least seven cargoes, people with direct knowledge of the matter said.

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Refining sources said traders have been ready to strike deals in dirhams, but Russian sellers have held out for yuan.

Rosneft, Gazprom and Gazprom Neft did not reply to requests for comment.

State-run Indian Oil Corp, the country’s top refiner, has used yuan and other currencies to pay for Russian oil, Reuters reported previously.

Other state refiners Bharat Petroleum Corp (BPCL) and Hindustan Petroleum (HPCL), which to date have not paid for oil in yuan, have also been asked by Russian suppliers to pay using Chinese currency, sources said.

Private Indian refiners have continued to pay in yuan and other currencies for Russian oil imports, sources said, with most Indian purchases of Russian oil paid in dirham.

Two refining sources said settlement in yuan increases their costs, as rupees first need to be converted to Hong Kong dollars and then yuan, a process that costs 2-3 per cent more than settling in dirham.

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