Indian Refiners transacting in Chinese Yuan for Russian Oil

As a result of Western sanctions, which require Moscow and its clients to find alternatives to the dollar for payment settlement, Indian refiners have started paying for part of their imports of oil from Russia in Chinese yuan, according to people with direct knowledge of the situation.

India has emerged as the leading consumer of seaborne Russian oil as a result of Western sanctions imposed in response to Russia's invasion of Ukraine, even as it ponders how to pay for it in light of shifting penalties.

The yuan is now playing a more significant role in Russia's financial system since Moscow has been cut off from the dollar and euro banking networks by international financial institutions. The U.S. dollar has long been the primary global oil currency, including for purchases by India.

China has also shifted to the yuan for most of its energy imports from Russia, which overtook Saudi Arabia to become China's top crude supplier in the first quarter this year.

"Some refiners are paying in other currencies like yuan if banks are not willing to settle trade in dollars," said an Indian government source.