Russia is facing difficulties in collecting oil payments in light of banking scrutiny from China, the UAE and Türkiye

0

Eight informed sources said that Russian oil companies are suffering from delays of up to several months in receiving payments for crude and fuel, as banks in China, Türkiye and the UAE become increasingly wary of secondary US sanctions.

Delaying payments reduces Moscow’s revenues and makes them irregular, which allows Washington to achieve two goals of its sanctions policy, obstructing the flow of funds to Russia as punishment for the Ukraine war, while this doesn’t result in obstructing the flow of global energy supplies.

According to eight banking and commercial sources, many banks in China, the UAE and Türkiye have increased their compliance with sanctions restrictions in the past few weeks, resulting in delays or even rejection of financial transfers to Moscow.

To avoid falling under secondary US sanctions, banks have begun asking their clients to provide written guarantees that no individual or entity on the US sanctions list will benefit from or participate in the payments.

The sources requested that their names not be mentioned due to the sensitivity of the matter and because they aren’t allowed to speak to the media.

Two sources said that First Abu Dhabi and Dubai Islamic Banks in the UAE suspended several accounts linked to trade in Russian goods.

Four sources said that Mashreq Bank in the UAE, the Turkish Ziraat and Endowment Banks, the Industrial and Commercial Bank of China (ICBC) and the Bank of China are still handling these payments, but the approval process takes weeks or months.

Mashreq Bank declined to comment, while the rest of the mentioned banks did not respond to requests for comments.

Kremlin spokesman Dmitry Peskov, when asked about reports that China’s banks are slowing down payments, said there was already an existing payments problem.

“Of course, the unprecedented pressure from the United States and the European Union on China continues,” Peskov told a daily conference call with reporters.

“This, of course, causes certain problems, but it won’t become an obstacle to the development of our trade and economic relations with China,” he added.

According to an informed banking source, since the end of February, UAE banks have strengthened payments audits after they were asked to provide data to US correspondent banks and the US Treasury Department on whether they had financial transfers going to China on behalf of a Russian entity, and this means delays in processing payments to Russia, one source said.

Share it...

Leave a Reply

Your email address will not be published. Required fields are marked *