India State Refiners Consider Paying in Yuan for Russian Crude
India’s state oil refiners Bharat Petroleum Corp. and Hindustan Petroleum Corp. are considering paying for Russian crude in yuan in an effort to widen their currency options.
(Bloomberg) -- India’s state oil refiners Bharat Petroleum Corp. and Hindustan Petroleum Corp. are considering paying for Russian crude in yuan in an effort to widen their currency options.
Most payments are currently made in dirhams and dollars, and the risk that the use of these currencies for trade with Russia will be stopped is making the refiners look for alternatives, officials from the two companies said, asking not to be identified due to the sensitivity of the matter.
India’s oil imports from Russia hit a record 2.2 million barrels a day in June, rising for a 10th month in a row and exceeding the combined shipments from the next two largest providers Saudi Arabia and Iraq, according to Kpler data. New Delhi has benefited from discounted purchases as many other nations shun Moscow’s crude following the war in Ukraine. Russia in turn has found a ready buyer.
Indian Oil Corp., the biggest state refiner, paid in yuan for Russian purchases last month, Reuters reported. The HPCL and BPCL executives said they weren’t aware of any payments in the Chinese currency.
Spokesmen at India’s oil ministry, HPCL, BPCL and Indian Oil didn’t immediately reply to phone calls and text messages seeking comments.
The refiners are unlikely to use the yuan for multiple cargoes from Russia as higher demand for the currency will make the exchange rate unfavorable, an HPCL official said. Selling dollars to buy yuan would also result in India effectively helping China further its currency agenda, potentially a politically unpalatable step.
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