Russia is seeking payment in UAE dirhams for oil exports to some Indian customers, three sources and a document showed, as Moscow moves away from the US dollar to protect itself from the effects of Western sanctions.

Russia has been hit with a series of sanctions from the United States and its allies following its invasion of Ukraine in late February, which it calls a “special military operation”.

An invoice seen by Reuters shows that the invoice for supplying oil to a refiner is calculated in dollars while payment is requested in dirhams.

Russian oil giant Rosneft smuggles crude through trading companies such as Everest Energy and Coral Energy to India, now its second-largest oil buyer after China.

Western sanctions have prompted many oil importers to avoid Moscow, pushing spot prices for Russian crude to record discounts to other grades.

This provided Indian refiners, who rarely bought Russian oil due to high transportation costs, an opportunity to export at very favorable prices to Brent and Middle Eastern commodities.

Moscow replaced Saudi Arabia as India’s second largest oil supplier after Iraq for the second consecutive month in June.

At least two Indian refiners have already settled some payments in dirhams, the sources said, adding that more would make such payments in the coming days.

The invoice indicated payments to be made to Gazprombank through Mashreq Bank, its correspondent bank in Dubai.

The UAE, seeking to maintain what it says is a neutral position, has not imposed sanctions on Moscow, and the payments could add to the frustration of some Westerners, who say privately that the UAE’s stance united is untenable and sides with Russia.

Trading companies used by Rosneft began asking for the equivalent dollar payment in dirhams from this month, the sources said.

Rosneft, Coral Energy and Everest Energy did not respond to emails from Reuters seeking comment.

Russia wants to increase its use of non-Western currencies for trade with countries like India, its Foreign Minister Sergi Lavrov said in April.

Last month, the country’s finance minister also said Moscow could start buying currencies from “friendly” countries, using those assets to influence the dollar and euro exchange rate to counter sharp rises. ruble.

The Moscow exchange office is preparing to launch trading in the Uzbek sum and the dirham.

Dubai, the financial and commercial center of the Gulf, has become a haven for Russian wealth.

India, which also maintains a neutral stance, recognizes insurance coverage by Russian companies and has offered classification to vessels run by a Dubai-based subsidiary of Moscow’s premier shipping group to allow trade.

India’s central bank last week introduced a new mechanism for settling international trade in rupees, which many experts see as a way to promote trade with countries under Western sanctions, such as Russia and Iran.