China is ditching the dollar, fast

Traders have urged Indian state refiners to settle payments for Russian oil in Chinese yuan as relations between New Delhi and Beijing show signs of improvement, Reuters reported on Oct. 8, citing trade sources.

According to the report, Indian Oil Corp, the country’s largest state-owned refiner, has recently completed two to three purchases of Russian oil using the yuan.

Moscow has leaned more heavily on the Chinese currency for international trade since Western sanctions were imposed following its full-scale invasion of Ukraine in 2022. The yuan has also gained traction globally as an alternative currency for oil settlements, challenging the traditional dominance of the U.S. dollar in the sector.

Since the start of the war, India has emerged as one of Russia’s top crude customers, alongside China. Energy sales remain critical to Moscow, accounting for about a third of federal revenues and helping to sustain its wartime economy. Indian buyers previously used yuan to pay for Russian oil in 2023, but halted such transactions during a period of heightened tensions with Beijing.