Business / Indian companies are buying Russian crude oil by paying UAE Dirham

Russia Ukraine War: Ever since Russia attacked Ukraine, the West under the leadership of America has imposed various sanctions on it. Western countries have also imposed many restrictions to stop Russia's oil exports. Although India continued to buy oil from Russia.

Indian companies have now found a new way to buy oil from Russia. According to media reports, Reliance Industries, BPCL and Nayara Energy are using UAE's currency Dirham to buy Russian oil. These companies are doing this to avoid western sanctions.

According to Bloomberg reports, according to people with direct knowledge of the matter, buyers have shifted some transactions to this currency. The payment varies from cargo to cargo depending upon the demands of the specific traders. However, Reliance, BPCL and Naira have not made any immediate comment on this.

The UAE provides the dirham to both Indian buyers and Russian sellers with a relatively predictable currency (pegged to the dollar) – the greenback without the complications of potential sanctions, even on deals that would violate US and EU sanctions. Do not infringe directly. India is the second largest trading partner of UAE. The authorities are working on a mechanism to promote trade in dirham and rupee.

Most deals still in dollars

Most oil deals are still being done in dollars. India's oil minister said he was unaware of the use of the dirham in oil purchases.

“If you are asking me officially whether I know about these payment channels, no, I am not,” Hardeep Singh Puri said in an interview in Bengaluru on Monday. Ready to discuss, he said. 'If the need arises, we will have to talk.'

Import of oil from Russia reached record level in January

According to PTI language, India's crude oil purchases from Russia have been more than traditional suppliers from West Asia for the fourth consecutive month in January. Refinery companies are continuously buying Russian crude oil available at a discount. Before the start of the Russo-Ukraine war, the share of Russian oil in India's imports was less than one per cent.

According to energy shipment tracker Vortexa, India's crude oil imports from Russia rose to a record high of 1.27 million barrels per day in January. In this way, the share of Russian crude oil in India's imports has increased to 28 percent. India is the third largest importer of crude oil in the world after China and America.