As the Indian market continues to deal with the global energy crisis emanating from the Iran War, Indian refiners are settling payments for limited cargoes of Iranian crude oil using the Chinese yuan, with transactions being routed through ICICI Bank, according to a report from Reuters.
This comes on the back of US unveiling a 30-day waivers on US sanctions for the purchase of Russian and Iranian oil at sea, which was an effort to curb a surge in glbal oil prices.
US Treasury Secretary Scott Bessent had subsequently stated that the US would not renew the weavers, with exemption for Iranian oil set to expire this Sunday.
In addition to securing these cargoes, India has also allowed four vessels carrying Iranian oil to anchor for Reliance Industries, as per Reuters. A vessel called the MT Felicity was discharged so far.
The report adds that ICICI Bank is settling by routing these funds in Chinese Yuan via the Shanghai branch to seller accounts.
Reacting to this report, Sujata Sharma, Joint Secretary, Ministry of Petroleum & Natural Gas said Indian OMCs are operating within laws and have not done something incriminating.
"Meeting our domestic need is the imp thing for us. Within the rules, our OMCs are operating," Sharma said.
Iran, for its part, has floated the idea of charging vessels for passage through the Strait of Hormuz, which has seemingly become the focal point of unrest between Iran and United States.
The Strait of Hormuz of strategically critical for India as well as the nation largely relies on oil imports for its energy needs. But the prolonged unrest in the region that led to the closure of the Strait is starting to take a toll, leading to a considerable inflation in fuel and LPG prices, although India has been far less impacted compared to its Asia Pacific counterparts.
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