Delaying oil payments reduces the Kremlin’s revenues and makes them irregular (Getty)
Reuters reported, without naming them, sources who said that Russian oil companies are suffering from delays of up to several months in receiving payments for crude oil and fuel, in light of the increasing caution of banks in China, Turkey and the UAE about secondary US sanctions.
Delaying payments reduces the Kremlin’s revenues and makes them irregular, which allows Washington to achieve two goals of its sanctions policy, which are to obstruct the flow of funds towards Russia against the backdrop of the war in Ukraine, while this does not result in obstructing the flow of global energy supplies, according to Reuters.
According to Reuters banking and trade sources, many banks in China, the UAE and Turkey have strengthened their compliance with sanctions restrictions in the past few weeks, resulting in delays or even rejection of financial transfers to Moscow.
To avoid falling subject to secondary US sanctions, demand banks began providing written guarantees to their clients that no individual or entity on the US sanctions list will benefit from or participate in the payments.
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 also 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 dealing with these payments, but the process of approving them takes weeks or months.
Mashreq Bank declined to comment, while the rest of the mentioned banks did not respond to requests for comments, as Reuters reports.
Kremlin spokesman Dmitry Peskov, when asked about reports that China's banks are slowing payments, stated that there is already an existing payments problem.
"Of course, the unprecedented pressure from the United States and the European Union on China continues. This, of course, causes certain problems, but it will not become an obstacle to the development of our trade and economic relations" with China, Peskov told a daily conference call with reporters.
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 American correspondent banks and to the US Treasury Department on whether they had financial transfers going to China on behalf of a Russian entity.
“This means delays in processing payments to Russia,” one source said.
Last December, Alexander Novak, Russian Deputy Prime Minister responsible for energy affairs, announced that his country had almost completely redirected its oil exports to China and India, adding that it was now selling 45 to 50% of its oil to China and 40% to India.
Source: Al Jazeera + Reuters