Reuters: It has become more difficult for Russia to export oil because China, the UAE and Turkey have tightened control over banks

Oleksandra Opanasenko

Russian oil companies have faced delays of up to several months in payments for crude oil and fuel as banks in China, Turkey and the United Arab Emirates (UAE) tightened controls over fears of secondary US sanctions.

Reuters writes about this with reference to sources.

Payment delays reduce Russiaʼs revenues and make them unstable. This allows the US to achieve a dual goal in the field of sanctions — to disrupt the flow of money to the Russian Federation without interrupting global energy flows.

In recent weeks, several banks in China, the UAE and Turkey have stepped up their demands to comply with the sanctions, leading to delays or even denials of money transfers to Moscow, eight banking and trading sources said. Banks, fearing secondary US sanctions, began asking their customers to provide written guarantees that no sanctioned natural or legal person participates in the transaction and is not the beneficiary of the payment.

In the UAE, First Abu Dhabi Bank (FAB) and Dubai Islamic Bank (DIB) blocked several accounts related to trade in Russian goods. The UAEʼs Mashreq Bank, Turkeyʼs Ziraat and Vakifbank, and Chinaʼs ICBC and Bank of China still process payments, but take weeks or months to do so.

Banks refuse to comment on this. However, Kremlin spokesman Dmytro Peskov admitted that there were indeed problems with payments when asked about reports of a slowdown in Chinese bank payments.

What preceded

In December 2022, the G7 countries and the EU introduced a ceiling price for Russian oil at the level of $60 per barrel. Moscow began to circumvent these restrictions with the help of a shadow fleet — tankers that fly under the flags of countries that have not joined the sanctions and are owned by Russian companies.

According to Bloomberg, in 2023, almost all Russian oil delivered by sea was sold at a price above $60 per barrel. In December 2023, the United States and other G7 countries announced the strengthening of measures to monitor compliance with the "price ceiling" on Russian oil. Shipping companies and tankers began to fall under sanctions.

However, Russia still remains one of the worldʼs largest energy exporters, even despite Western sanctions imposed on its oil and gas sector. At the end of last year, it was reported that Russiaʼs monthly income from oil exports is now greater than it was before the full-scale invasion of Ukraine. In October 2023, net income from Russian oil reached $11.3 billion, which is 31% of the total income of the Russian budget for the month. This is a record figure since May 2022.