Sources Say Russia is Leveraging Crypto to Conduct Oil Trade

Russia has turned to crypto for oil transactions with India and China to bypass Western sanctions, per sources familiar with the matter.

Although Russia legalized crypto for international trade last summer, its role in oil deals had not been widely reported until now. Some Russian oil firms are leveraging Bitcoin, Ethereum, and stablecoins like Tether to facilitate currency conversions between the Russian ruble, Chinese yuan, and Indian rupee.

While this practice accounts for a small portion of the overall trade, it is reportedly expanding. The International Energy Agency estimates that Russia’s oil trade was valued at $192 billion last year.

Crypto has previously helped sanctioned nations such as Venezuela and Iran keep their economies running without relying on the U.S. dollar, the dominant currency in global oil markets. Russia’s shift toward digital currency follows Venezuela’s increased reliance on crypto after Washington reinstated sanctions.

A researcher tracking crypto’s role in sanctions evasion, who spoke anonymously, said Russia has developed multiple financial strategies, with Tether being just one of them.

Meanwhile, U.S. President Donald Trump has expressed a desire to improve ties with Russia and resolve the war in Ukraine. However, the future of sanctions remains uncertain. Reports suggest the White House is considering easing restrictions, but on March 7, Trump indicated he might impose additional sanctions instead.

Regardless of whether sanctions are lifted, Russia is likely to continue using crypto in oil deals as they speed up transactions and offer operational convenience.

The process typically works through intermediaries. In practice, a Chinese company purchasing Russian oil might pay a trading intermediary in yuan, depositing the funds in an offshore account. This intermediary then converts the funds into cryptocurrency, transferring them to another account before eventually exchanging them for rubles in Russia.

According to one source familiar with these transactions, one Russian oil trader conducting business with China processes tens of millions of dollars in crypto payments each month.

However, traditional currencies still dominate Russia’s oil trade. Other alternatives include using the UAE dirham for payments.

Sanctions have also affected Russia’s crypto infrastructure. Garantex, a Russian crypto exchange, was sanctioned by the United States in 2022 and later by the European Union (EU). Last month, Tether blocked wallets linked to the platform, forcing it to halt operations.

While crypto is not the sole workaround, it remains a key tool for Russia in navigating financial restrictions, a Kremlin adviser confirmed.

As more countries incorporate crypto into their financial systems, entities like Riot Platforms (NASDAQ: RIOT) are likely to deepen their penetration in those countries as more people gain trust in these blockchain-based services.

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