India's state refiners settle some Russian oil payments in yuan

Traders supplying Russian crude have asked Indian state refiners to settle several recent shipments in Chinese yuan, and India’s largest state refiner has completed a small number of yuan-denominated payments in recent weeks, according to people familiar with the transactions. The shift comes as sanctions on Russia and tighter controls on dollar-based channels have made direct yuan settlements more attractive for converting payments into Russian roubles.

Traders say Russian oil continues to be priced in U.S. dollars to comply with the European Union’s price cap mechanism, but sellers are accepting equivalent amounts settled in yuan to remove an intermediate conversion step through dollars or UAE dirhams. That step previously added time and cost because only yuan can be directly converted into roubles at some trading hubs. Paying in yuan can therefore simplify and speed up the payment chain, traders said.

India has dramatically increased purchases of Russian crude since 2022 and has become one of Russia’s largest customers. Analytics firm Kpler estimates India’s imports from Russia could average about 1.7 million barrels per day in October, up roughly 6 percent month on month....