In order to circumvent Western sanctions, certain Indian refiners, including Reliance Industries Ltd., Bharat Petroleum Corp. Ltd., and Nayara Energy Ltd., use United Arab Emirates dirham to pay for some shipments of Russian oil.
The Bloomberg report claims that buyers have switched certain purchases to the currency. The report claimed that payments fluctuate from cargo to cargo and are partially based on the requirements of particular dealers.
India has become an even more significant consumer for exports as a result of the recent embargo by the European Union on the importation of refined oil products from Russia. Since June, Russia has been India's main source of crude oil as cargoes intended for Europe have been diverted to Asia and frequently sold at prices substantially below the $60 per barrel ceiling.
The pegged UAE dirham offers both Indian buyers and Russian sellers a generally predictable currency without the possible sanctions issues associated with the dollar. Some intermediary banks frequently go above and beyond to avoid any dangers to other financial ties abroad, even on transactions that don't explicitly breach US and EU rules.
Officials are working on a mechanism to increase trade in rupees and dirhams because India is the UAE's second-largest trading partner.
In a Monday interview in Bengaluru, Hardeep Singh Puri said, 'If you are asking me officially am I aware of these payment channels, no, I'm not. He indicated that officials are willing to discuss the matter with other nations. 'We'll need to talk if the necessity arises,'
However, a departure from the US currency would put some Washington authorities on edge. Brian Nelson, the senior sanctions official for the US Treasury Department, visited Abu Dhabi last week and expressed worries about the UAE's close financial ties to Russia.
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