Russia is increasingly using cryptocurrency to sell oil to China and India, allowing it to work around Western sanctions, according to multiple sources familiar with the situation.
While Russia has previously supported digital currencies and passed a law permitting their use in international trade, this is the first time their role in oil transactions has been reported. Sources indicate that Russian oil companies are utilizing Bitcoin, Ethereum, and stablecoins like Tether to convert Chinese yuan and Indian rupees into Russian rubles, making transactions faster and more resistant to restrictions.
Crypto Adoption in Russian Oil Trade is Growing
The International Energy Agency (IEA) estimates that Russia’s oil trade was worth $192 billion in 2024. Although cryptocurrency remains a small portion of these transactions, its use is expanding rapidly.
A source familiar with the matter said, “Crypto will likely continue to be used in Russian oil trading, even if sanctions are lifted and the dollar becomes available again.” This approach mirrors strategies used by Iran and Venezuela, both of which have leveraged digital currencies to sidestep U.S. sanctions in the global oil market. Venezuela, for instance, has increasingly turned to cryptocurrency for crude and fuel exports since Washington reimposed sanctions.
How Russia Uses Cryptocurrency for Oil Payments
According to sources tracking crypto transactions in Russian oil deals, payments typically follow this pattern:
• A Chinese buyer transfers yuan to a trading company’s offshore account.
• The company converts the funds into cryptocurrency, often using Tether (USDT).
• The crypto is transferred through multiple digital wallets for anonymity and security.
• Finally, the funds are converted to Russian rubles inside Russia, completing the transaction.
One Russian oil trader is reportedly conducting crypto transactions worth tens of millions of dollars each month for sales to China.
Challenges and Uncertainty in Russia’s Crypto Oil Trade
Despite the increasing use of cryptocurrency, traditional currencies still dominate Russian oil transactions. Many payments are made in United Arab Emirates dirhams, which offer another workaround to Western restrictions.
However, Russia’s crypto-based oil trading faces risks. The U.S. sanctioned Russian crypto exchange Garantex in 2022, and the EU imposed further restrictions last month. Following these actions, Tether blocked Garantex’s wallets, leading the exchange to suspend services.
The Russian central bank has not commented on the situation but previously acknowledged that sanctions have caused major payment delays for the country’s economy.
Future of Russian Oil Sanctions and U.S. Policy
The future of sanctions on Russian oil remains uncertain. Some reports suggest that the White House may ease certain restrictions, but former U.S. President Donald Trump has indicated he could impose even stricter sanctions if elected again.
As geopolitical tensions evolve, Russia’s increasing reliance on cryptocurrency in oil trade signals a new era of financial maneuvering in response to global economic pressures.
