India to Pay for Russian Oil in Dirhams

It was reported on July 19th that Russia is seeking to require some Indian customers to pay in United Arab Emirates (UAE) dirhams for oil export deals. Russia’s invasion of Ukraine in late February was subject to a series of sanctions by the United States and its allies. The demand for payment in dirhams was an attempt to reduce the use of U.S. dollar to mitigate the impact of Western sanctions.

According to an oil supply invoice from a refinery revealed by the media, the bill was in U.S. dollars, but buyers were asked to pay in dirhams.

Western sanctions have prompted many oil importers to stop importing Moscow oil, resulting in the largest-ever price differential between Russian oil and oil of other grades.

Indian refiners took the opportunity to snap up Russian oil at deep discounts. Moscow replaced Saudi Arabia as India’s second largest oil supplier after Iraq for the second month in a row.

At least two Indian refiners have settled some of the payments in dirhams, with more to follow in the coming days, the sources said.

The UAE has maintained a neutral position on the Russian-Ukrainian war and has not imposed sanctions on Moscow. The dirham payment for oil this time added to the West’s accusation of the UAE’s war crimes in favor of Russia.