Rupee Based Trading of Oil
Context:
• As the Western sanctions has hit the Russian Dollar based trading, it is looking to switch to trade in Chinese Yuan and the rupee.
• But the Ministry in India has clarified that India will not trade with Russia or any other country in Indian rupee.
What is happening?
• India is making use of the situation to buy the oil from Russian firms through spot tenders.
• This oil which Indian firms are procuring are being available with deep discounts.
• While some other buyers who have condemned Moscow’s action in Ukraine have refrained from buying oil from Russia.
What was the situation earlier?
• India is heavily dependent on oil from various countries, 85% of India’s crude oil requirements are met through imports.
• India’s crude oil imports have majorly come from Iraq followed by Saudi Arabia and USA.
• Refineries had been reluctant to buy oil from Russia owing to its high freight costs, which will increase the cost of production.
Source: THE HINDU.
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