Indian government officials have delayed payment in yuan for at least seven shipments of Russian oil destined for local refineries. Reuters reports, citing multiple insiders familiar with the arrangements. The reports indicate that payments tied to these shipments have not yet been completed, even as cargoes move through their scheduled paths. The situation underscores tensions around currency choices in bilateral energy trade, with talks and timelines dragging on as traders weigh the risks and potential impact on refinery operations across the country.
According to Reuters, the interrupted operations have not received final settlement, leaving traders and banks in a state of partial uncertainty. In practical terms, this means that some buyers may have to rely on letters of credit, while others face delays in settlement cycles that ripple through supply chains. The gap between shipment delivery and payment clearance creates a pause in the normal cash-flow dynamics that power the refining sector in India and the wider arc of South Asia’s energy market.
As media outlets have clarified, Indian refineries are now anticipating Russian oil shipments to resume at or after the end of September 2023. The scheduling shift reflects ongoing negotiations over payment currencies, risk management, and the securing of supply lines that Indian processors depend on to meet domestic demand. Industry observers note that any late shipments or payment stumbles could influence refinery uptime and maintenance planning for the autumn season.
The delay in payment is linked, as reported, to a cautious attitude among Indian authorities toward increasing use of Chinese yuan for raw material payments instead of the rupee. Market participants describe a careful approach from regulators as they weigh currency diversification, exchange-rate exposure, and the political implications of moving away from traditional settlement currencies for energy trades with Russia.
Apart from Yuan, another plausible option considered by some traders was the Arab dirham. However, Russian suppliers reportedly refused to transact in UAE currency for these cargoes, steering discussions back toward negotiated currencies that balance risk and convenience for both sides of the deal. The stance from sellers highlights how currency choice remains a central lever in bilateral energy commerce and how negotiations adapt to evolving geopolitical taste and market conditions.
Additionally, a representative from the local Ministry of Finance explained that Indian authorities do not have broad authority to ban private companies from purchasing oil from Russian suppliers in exchange for yuan. The official emphasized that private sector decisions in this space remain a matter for market participants, while regulators monitor macroeconomic stability and currency risk. This stance illustrates the tension between policy objectives and practical business autonomy in a volatile energy landscape.
India has previously offered discounts of up to 8 to 10 dollars per barrel on Russian oil as part of an effort to maintain favorable terms for domestic refiners amid shifting global prices. Industry insiders point out that such price concessions are often used to preserve supply continuity and to support domestic energy security goals, especially as the country weighs its long-term energy mix and supplier diversification strategy.
Earlier episodes in the market have shown a pattern where oil prices dipping to around 50 dollars per barrel coincided with renewed discussions about payment methods and settlement currencies. In those moments, buyers and sellers tested the boundaries of currency choice, risk tolerance, and regulatory comfort—an ongoing dance that continues to shape how energy trade is conducted between India, Russia, and other major players in the region.