Home Commodities Russian Oil Ships Turn Away From India Amid Payment Scuffle With Moscow

Russian Oil Ships Turn Away From India Amid Payment Scuffle With Moscow

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  • Russian oil tankers are turning away from India amid disagreements over payment.
  • The tankers had been hovering near the shores of India and Sri Lanka for about a month.
  • India is paying for Russian oil in UAE currency, but one major supplier has been unable to accept payment.

Russian oil ships drifting near India’s shores have begun to turn away amid unresolved payment disputes between the two countries. 

According to ship-tracking data compiled by Bloomberg, five oil tankers carrying Sokol oil, which have been idling close to India and Sri Lanka for about a month, are now headed eastward toward the Malacca Straight.

Another Russian ship — the NS Century — is still drifting near the shores of Sri Lanka. The tanker has been idling for over a month as Indian officials mull over whether to let the ship unload its cargo, Bloomberg previously reported.

The turnaround comes as Indian refiners are paying for oil with Russia in dirhams, the currency of the United Arab Emirates, people familiar with the matter told Reuters last week. But a unit of Rosneft, one of Russia’s state-run oil giants, hasn’t been able to open a bank account in the UAE, meaning it’s unable to accept payment, sources added.  

As of October, India had at least seven oil shipments from Russia that hadn’t been paid, Reuters originally reported.

India is also under pressure to remain on good terms with the US, which sanctioned the NS Century late in 2023 for trading oil with Russia above the $60 per barrel price cap. Those restrictions are part of the West’s attempt to ramp up pressure on Russia’s energy revenue that it is using to fund its war against Ukraine. 

India has become one of Russia’s largest oil customers since the invasion of Ukraine began in 2022. Russia now exports nearly all of its oil to China and India, Russia’s deputy prime minister said last week – though shipments to India have recently stalled on payment issues. Russian oil exports in India cratered in December, with Indian refiners receiving no Sokol crude that month at all, according to Kpler data cited by Bloomberg.

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