Sources say Russia is asking export partners to settle payments in UAE dirhams

Sources say Russia is asking export partners to settle payments in UAE dirhams
Russian President Vladimir Putin attends a meeting with Turkish President Tayyip Erdogan in Tehran, Iran July 19, 2022. Sputnik/Sergei Savostyanov/Pool via REUTERS

With Western sanctions piled on Russia’s economy, the country is looking for other ways to protect itself and continue doing business with countries that haven’t yet condemned the Ukraine war, such as China and India.

Now, according to several people familiar with the situation who spoke with Reuters, Russia’s actively trying to move away from the US dollar and is seeking payment for some of its oil exports in UAE dirhams, also known as Emirati dirhams. An invoice issued reportedly used dollars to calculate the payment but requested payment in dirhams. The sources also said that some Indian refiners have settled payments in dirhams, and more will do so in the coming days. The UAE has remained neutral in its position on the Ukraine-Russia war, and this payment situation is likely to annoy the West. Meanwhile, India’s central bank has introduced a new way to settle international payments in rupees, which many interpret as the third-largest economy’s way to continue working with countries hit with US sanctions, like Russia and Iran.

Key comments:

“It is absolutely clear that more and more transactions would be done through this system using national currencies, bypassing dollar, euro and other currencies," Russian minister Sergei Lavrov said back in April of this year. “We will be ready to supply any goods which India wants to buy."

“Through the currencies of friendly countries, through cross-rates with the dollar and the euro it will be possible to regulate the cost of the euro and the dollar to the rouble," Russian Finance Minister Anton Siluanov said in late June at a Russian business conference.

“Whether the West likes it or not, India will try to secure its energy needs – and that’s what it’s doing," said Edward Chow, a veteran energy analyst and former Chevron executive.