India insists on paying for Russian oil with its own rupees. The Central Bank of the Russian Federation has issued an unspoken ban on accepting rupees as payment for oil.
The Indian route, one of the most profitable oil trade routes with Russia since the imposition of Western sanctions, faces a major challenge due to payment issues. Reuters reported this on November 27, citing sources.
For decades, the US dollar has been the currency of the international oil trade, and attempts to find an alternative have been hampered by conversion difficulties as well as political obstacles.
Problems escalated when India, which became the biggest buyer of offshore oil from Russia after European customers balked, insisted on payment in rupees in July and trading activity came to a virtual standstill.
Russian oil suppliers cannot enter into agreements in Indian rupees because of unofficial instructions from the Russian Central Bank that it will not accept the currency, sources said. Earnings in non-convertible currencies have little value outside India. Russia has limited ability to spend rupees as its imports from India are negligible, another source said.
In mid-August, at least two major Russian oil companies threatened to divert about a dozen tankers carrying up to one million tons of oil bound for India to other destinations.
As a temporary solution to the dispute over agreements with India, freight was paid in a combination of the Chinese yuan, the Hong Kong dollar as a transition currency to the yuan and the UAE dirham pegged to the US dollar.
However, they said the challenge of finding a viable alternative to the dollar remained, affecting buyers in Africa, China and Turkey, which have been Russia’s biggest oil buyers. However, the biggest problem concerns India, which buys more than 60% of Russian marine oil.
The publication writes that the problems are likely to worsen as trade controls are strengthened.
We remind you that the United States introduced the first sanctions against the owners of tankers carrying Russian oil at a price above the Western price limit of $60. It was reported that oil companies exporting through Baltic Sea ports could not find ships for some of the cargoes scheduled for shipment in November.
New Correspondent.net on Telegram and WhatsApp. Subscribe to our channels Athletistic and WhatsApp
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.