Domestic refiners who have been lapping up Russian crude have reportedly begun to pay in yuan as they look at other currency options amid the Western sanctions on Moscow.

According to a Reuters report, since currencies like the dollar and the euro cannot be used as payment for imports from Russia, the oil refiners have started to pay in the Chinese currency if banks are not willing to settle in the US greenback.

It added that Indian Oil in June became the first state-owned oil firm to pay for some Russian purchases in yuan and that at least two of India’s private refineries are paying in the Chinese unit as well.

Separately Bloomberg reported that both BPCL and HPCL are considering paying for Russian crude in yuan, apart from other currencies like dirhams.

Forex circles said that companies like HPCL, BPCL, IOC, and other private sector refiners can source Yuan from domestic banks.

While India has been keen on settlement of trade in rupees as it looks to internationalise the currency, reports had earlier said that due to a lopsided trade relationship with India Russia has been accumulating huge rupee assets each month which its companies have trouble repatriating because of local currency restrictions.

The trend had then led to speculations that importers in India could also use the Yuan as one of the currencies to settle the trade with Russia.

Viktor Katona, the head of crude analysis at Kpler, an analytics firm told Bloomberg recently that India imported a record volume of the feedstock from Russia in June.