Russia asks India to help bypass Western sanctions

Russia’s state-owned energy giant Gazprom has asked India’s largest gas distributor to pay for gas imports in euros instead of dollars, a move which experts believe signals the Kremlin’s desire break its economic dependency on the U.S. currency.

Last week, Gazprom wrote to GAIL requesting that future payments for gas purchases be made in euros instead of dollars, and sources familiar with the matter have said India is likely inclined to oblige the request, Reuters first reported.

"GAIL doesn't see any problem in settling payment in euros as European countries are paying for their imports in euros," one unnamed source told the outlet.  

India’s state-run oil corporation -- which imports and distributes gas and operates India's largest gas pipeline network – has a long-term gas import deal with Gazprom Marketing & Trading Singapore to buy 2.5 million tons of liquefied natural gas annually in dollars.

Although unprecedented global sanctions have successfully blocked Russia from most sectors of the Western market, the source warned that sanctions might not prevent payments in euros because GAIL’s contract is with a Singapore unit of Gazprom.

But as Europe’s willingness to join the United States and Britain in targeting Russian energy continues to waver (note: some European countries rely on Russia for up to 40% of their oil), Russian President Vladimir Putin announced on Wednesday that Moscow would soon require that “unfriendly” countries pay for fuel in rubles – a move which many European governments have said would break their contract.

India, on the other hand, has refused from condemning Russia’s invasion of Ukraine and has continued to purchase Russian fuel – whose price fell by upwards of 29% last week.

In recent days, private Indian refiner Nayara Energy, part-owned by Russia’s Rosneft, purchased approximately 1.8 million barrels of export grade crude oil from Moscow.

Similarly, state-owned Indian Oil Corporation bought 3 million barrels, Hindustan Petroleum purchased 2 million and India also brought home several cargoes of Russian oil that were turned away at European ports.