Due to the Russia-Ukrain war, there have been many payment channel-related restrictions, and these restrictions are now causing trouble for the Indian public sector oil companies.
Indian public sector oil companies have about $6000 Million stuck in dividends in Russian bank accounts, due to the restrictions Indian oil companies like ONGC Videsh (OVL), Oil India (OIL), Indian Oil Corporation (IOC), and Bharat Petroleum Corporation (BPCL) arm Bharat PetroResources aren't able to access or transfer this money.
The Indian Petroleum diaspora has recently started to look into legal.l ways they can use their $6000 Million to buy Crude oil from Moscow. As Russia is India’s current biggest source of Oil.
“The most practical and viable option would be to use that money to partly pay for oil being bought from Russia. However, there are many financial and legal complexities. We are working on those to find a solution,” a senior official with one of the Indian oil majors stated.
Officials also said, “One of the ways for utilizing the stranded money for payments could be to lend it to Indian refiners buying Russian oil” If this is how the Indian oil companies decide to move forward, then the refiners will use the money stuck in Russia to partly pay for their oil purchases, and then repay the loan in India.
As of now, the money is in the Commercial Indo Bank (CIBL) and the Indian oil companies are looking for legal and feasible ways to relocate it.
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