Russia is looking to receive the UAE dirham in exchange for oil exports to some Indian customers, three sources and a document said on Monday, July 18, 2022, as Moscow moves away from the dollar to protect itself against the greenback. The effects of Western sanctions
Russia has been under a series of sanctions by the United States and its allies for its invasion of Ukraine in late February 2022, which it described as a “special military operation.”
An invoice seen by Reuters shows that the payment of oil to a refinery is calculated in dollars and it is necessary to pay it in UAE dirhams.
Russia’s state-owned oil giant Rosneft pumps crude through trading companies including Everest Energy and Coral Energy to India, which is now the second-largest oil buyer after China.
In a related context, Western sanctions have forced many oil importers away from Moscow, pushing Russian crude prices to record lows in spot deals compared to other grades.
This gave Indian refiners, who rarely bought Russian oil due to high transportation costs, an opportunity to export at deep discounts on Brent and Middle Eastern crude.
On the other hand, Moscow replaced Saudi Arabia as India’s second largest oil supplier after Iraq for the second consecutive month in June 2022. At least two Indian companies have already made some payments in dirhams, the sources said. Payments will be made in the coming days.
This invoice showed that the payments were made to Gazprom Bank through Mashreq Bank, the Correspondent Bank in Dubai. The United Arab Emirates, which seeks to maintain its neutral position, has not imposed sanctions against Moscow. The payments could add to the frustration of some in the West, who privately say the UAE’s position is indefensible and that they are siding with Russia.
On the other hand, the sources said that trading companies with which Rosneft deals have started asking for payments in the UAE dirham equivalent. Rosneft, Coral Energy and Everest Energy have yet to respond to emails from Reuters seeking comment.
Russian Foreign Minister Sergei Lavrov said in April 2022 that his country wants to increase its use of non-Western currencies in trade with countries such as India.
The country’s finance minister also said that Moscow might start buying the currencies of “friendly” countries as a way to counter the ruble’s sharp rise.
Source: Lebanon Debate
