Russia is increasingly using cryptocurrencies in its oil trade with China and India to circumvent Western sanctions, according to four sources with direct knowledge of the matter. While the country has publicly encouraged digital currency transactions and passed a law last summer allowing crypto payments in international trade, its use within Russia’s oil sector had not been previously reported.
Sources revealed that some Russian oil companies are using bitcoin, ether, and stablecoins such as Tether to convert Chinese yuan and Indian rupees into Russian roubles. Although this currently represents a small fraction of Russia’s overall oil trade, which was valued at $192 billion last year according to the International Energy Agency, its usage is reportedly growing. All four sources declined to be identified due to the sensitivity of the matter.
Cryptocurrencies have previously allowed sanctioned countries such as Iran and Venezuela to sustain their economies while avoiding reliance on the US dollar, the dominant currency in global oil transactions. Russia’s move follows Venezuela’s increased use of digital currency in crude and fuel exports after Washington reimposed sanctions. A fifth source, a researcher at an investigations firm tracking cryptocurrency use for sanctions circumvention, said Russia has established multiple systems, with Tether (USDT) being just one of them. The source, who spoke under a non-disclosure agreement, did not provide further details.
The Russian central bank did not respond to requests for comment but previously acknowledged that payment delays caused by sanctions have posed a major challenge to the Russian economy. US President Donald Trump is seeking improved relations with Russia while pushing for an end to the war in Ukraine, though it remains unclear whether sanctions will be lifted. Reuters reported that the White House is considering sanctions relief options, but Trump posted on 7 March that he is strongly considering further sanctions against Russia.
Even if sanctions were lifted and dollar transactions resumed, one of the four sources stated that crypto usage in Russian oil trading would likely continue due to its efficiency and ability to streamline operations. Explaining how the trade functions, two sources familiar with the transactions said that a Chinese buyer of Russian oil transfers yuan into an offshore account controlled by a middleman. The middleman then converts the funds into cryptocurrency, transfers them to another account, and ultimately sends the crypto to a third account in Russia, where it is converted into roubles.
One of the sources, who is familiar with a Russian oil trader’s operations in China, said crypto transactions for the trader amount to tens of millions of dollars per month.
Faridah Abdulkadiri
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