India could advance the de-dollarization agenda and procure Nigerian oil and settle payments in their local currency, the naira, according to a latest de-dollarization report from Firstpost Africa. The report also claims that Indian refiners, especially Indian Oil, have placed orders for Nigerian oil, and over 2 million barrels are expected to reach Indian shores next month. However, the Modi government has not gone all-in on procuring crude from Nigeria.
If India fully decides to buy Nigerian oil, it will have to pay the naira and not the US dollar. The Nigerian government announced last year that oil and energy payments must be settled in the naira, and refiners must not accept the USD. This would make India inadvertently push de-dollarization if it intends to buy Nigerian oil and pay in naira. The global oil trade is shifting fast, and supply chains and policies are being redrawn.
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De-Dollarization Growing Under US Pressure: India Seeks Nigerian Oil, Will Pay in Naira
The steps were taken to boost the naira in the international markets and strengthen the local currency. While some refiners have objected to the rule, citing losses, the law remains intact despite opposition from various energy stakeholders. Nigeria is Africa’s largest oil producer, and India could soon come to the priority list of clients. Nigeria is among the first countries in Africa to push de-dollarization in oil payments, and India could soon use the naira.
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India faced 50% tariffs from the US for buying Russian oil despite sanctions being in place. The Modi government is now scrambling to find solutions and is looking to renew talks with the White House. Oil procurement from Russia was cheaper due to the sanctions and financially helped both countries. While Russia received constant business, India saved $7 billion in foreign exchange rates. De-dollarization is the only option left for survival, and India could buy Nigerian oil in naira, ushering a major change.