A seller of Russian crude gave Chinese buyers the flexibility to pay in yuan, as the energy giant attempts to keep its few remaining export channels flowing smoothly

Geneva-based Paramount Energy & Commodities SA offered to let some Chinese customers make payments in yuan for May-loading ESPO crude shipped from Russia’s Far East, according to traders with knowledge of the matter. Some Chinese independent processors purchased the cargoes, although it’s unclear if the deals were consummated in yuan, they said.

Paramount, which didn’t immediately respond to an emailed request for comment, is the latest seller of Russian crude to try to sweeten terms after many global buyers began shunning the nation’s cargoes following the invasion of Ukraine. Russian barrels have been offered at steep discounts to global benchmarks to try to entice the few buyers not dissuaded by sanctions fears, financing issues or moral outrage. Russian oil hasn’t been directly sanctioned yet.

The company markets a few cargoes of ESPO every month in the spot market on behalf of several producers, which each have very small stakes in the stream. 

Allowing for payments in yuan opens the door to Chinese buyers to purchase barrels without going through the international banking system, which has cut off several large Russian banks from using the international SWIFT cross-border payment system. Russia has also offered an alternative payment system for Indian rupee-denominated purchases.

An avenue to purchase discounted Russian oil would be compelling for smaller Chinese refiners struggling after global crude prices surged more than 30% this year. At the same time, a resurgence in virus cases in China has led to severe lockdowns in mega-cities like Shenzhen and Shanghai, cutting demand for power and transport fuel.