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Russian oil traders have recently begun asking Indian state-owned refineries to pay in yuan, Reuters reported exclusively, citing sources.
Reuters claimed that sources familiar with Russia-India oil trade said that Indian Oil Company, India's largest refiner, had paid for two to three shipments of Russian oil in RMB, but the Indian Oil Company had not responded to relevant reports.
Sources also said Russian oil traders had previously allowed buyers to pay in yuan, dirham, and dollar, but subsequently they needed to convert the dirham or dollar payment into yuan, and now Russian oil traders have begun to seek to simplify the process by requiring buyers to use the yuan directly.
“Russian oil is forced to turn to RMB.”
After the outbreak of the Russian-Ukrainian conflict, the West imposed financial sanctions on Russia, kicking some of its banks out of the SWIFT system, freezing foreign exchange reserves, and cutting off the dollar settlement channel.
India is an ideal target-India's crude oil imports from Russia will surge 10 times in 2023, accounting for 46% of its total imports, with an average daily import of 2.2 million barrels. However, the rupee settlement mechanism of Russia and India has become a "hot potato".
India has a huge trade deficit with Russia, with imports amounting to US $41.5 billion in fiscal year 2022-2023 and exports of only US $2.8 billion, resulting in tens of billions of rupees accumulating in Russian accounts that cannot be used. The rupee has poor liquidity in the international market, making it difficult for Russia to use it to buy the required goods, and even facing the risk of exchange rate depreciation.
India has proposed to establish a rupee settlement system, but Russia estimates that if it accepts this plan, it will generate a rupee surplus of over 40 billion US dollars every year, which may eventually lead to a "currency black hole". At the same time, the acceptance of RMB in the international market has increased rapidly.
By 2023, the Yuan’s share in global trade settlements rose to 24%, becoming the fifth-largest payment currency.Russian energy exporters have begun to try to settle in Yuan, both by circumventing sanctions and digesting foreign exchange reserves through China’s huge commodity market.
In June 2023, Indian Oil Company paid Russian crude oil in RMB for the first time, and completed the transaction through the Industrial Credit and Investment Bank of India through the Bank of China. This breakthrough marks a key step in the "de-dollarization" of global energy trade.
“India is forced to compromise.”
Although Russia demanded direct use of the yuan, the Indian government was initially reluctant. An official from the Indian Ministry of Finance said that using RMB settlement requires converting the rupee into Hong Kong dollars and then converting it into RMB, which increases the cost by 2%-3%.
More importantly, India is trying to boost its position through the internationalization of the rupee, while accepting the settlement of the yuan is equivalent to acknowledging that the rupee is undercompetitive.In October 2023, the Indian government even interfered with corporate decisions, leading to at least seven batches of Russian oil staying in ports due to payment disputes.
But realistic pressure forced India to give in. Indian banks are wary of US dollar settlements after the US imposed a $60 per barrel price cap on Russian oil. In May 2023, the State Bank of India refused to settle a US dollar transaction with Indian Oil Corporation on the grounds that the shipping company involved was related to Russian state shipping group.
At the same time, Russia began to simplify the payment process, requiring buyers to use RMB directly and no longer accept dirham or US dollar conversion. In order to maintain supply chain stability, Indian oil refiners have to accept this condition.
In 2025, India's compromise will be further escalated. The United States has imposed a 25% tariff on Indian exports, pressuring it to reduce Russian oil imports. State-owned enterprises such as Indian Petroleum Company reduced the proportion of Russian crude oil imports from 46% to 16.8%, and switched to purchasing crude oil from Nigeria and the United States.
But even so, India still cannot completely get rid of its dependence on Russian oil-the price of Russian Urals crude oil is US $10/barrel lower than the international benchmark. In the first half of 2025, India will save nearly US $17 billion by importing Russian oil. In order to balance costs, some refineries in India still choose to pay in RMB and complete transactions through the offshore market in Hong Kong.
“The transition from energy to finance.”
The impact of Rosneft's anchoring of the RMB far exceeds the scope of bilateral trade. In 2023, China and Algeria signed an LNG project agreement, with 85% of the contract value settled in RMB. In the same year, Argentina used RMB to repay its foreign debt of US $2.7 billion to the IMF for the first time, becoming the first Latin American country to use RMB to repay its sovereign debt.
These cases mark the transformation of the RMB from a trade settlement currency to a reserve currency. More importantly, China is building a payment system independent of SWIFT. The RMB Cross-Border Payment System (CIPS) covers more than 180 countries and regions, with payments processed in 2024 reaching 175.5 trillion yuan, a year-on-year increase of 42.6%.
Russian energy exporters receive RMB through CIPS, and funds can directly enter the China market to purchase goods or invest in bonds, forming a closed loop of "oil-RMB". In 2025, the SCO Development Bank will be formally established and will provide RMB loans to member states in energy, infrastructure and other fields to further consolidate the regional influence of the RMB.
The United States is helpless about this. Although the Trump administration has repeatedly put pressure on India and China, its sanctions tools have fatal loopholes. Russia bypasses the price ceiling through its "shadow fleet" of oil tankers, while India avoids risks through entrepot trade-in 2025, Indian refineries will process Russian oil and export it to Europe, making a profit of 15%.
Ironically, U.S. shale oil producers are digesting excess production capacity through the Chinese market, with LNG exports to China growing by 28% in the first half of 2025.
In the end, the United States had no choice but to compromise-in September 2025, the United States and India reached a preliminary agreement to suspend the imposition of tariffs on India, but India still retained some Russian oil imports. The decline of US dollar hegemony is essentially the result of US strategic misjudgment. Washington uses the US dollar as a sanction tool, but ignores that the foundation of currency internationalization is market trust rather than political coercion.
In contrast, China has gradually established the RMB credit system through energy cooperation, financial opening and infrastructure investment.In 2025, the global central bank's RMB reserves share rose to 6.8%, and the BRICS countries launched the "BRICS crude oil index", using the RMB, ruble, and ruble portfolio.
These changes herald the arrival of an era of multipolar currencies, in which the United States has lost the initiative. The story of Rosneft anchoring the RMB is a microcosm of the ebb period of globalization.
“ ... ... ... ... ... ... ... ”
When traditional hegemony tries to maintain order with sanctions, emerging forces are reforming the rules through innovation and cooperation.The international monetary system of the future may no longer be a confrontation of "this is he" but a synergy of pluralism.In this silent revolution, the RMB has quietly taken a place, and America's relentlessness is precisely the footsteps of the new era.