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India’s Nayara Energy Receives Smallest Crude Oil Shipment in History Due to EU Sanctions Against Russian Oil
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Nayara Energy, an Indian refiner part-owned by Russian oil giant Rosneft PJSC, is set to receive the smallest amount of crude oil in its history this month due to the impact of European Union sanctions, Bloomberg reported on August 12.
According to ship-tracking data from Vortexa and Kpler, Nayara is expected to receive just under 94,000 barrels of crude per day in August, a significant decline from nearly 366,000 barrels per day in the same period last year.
The refinery has already received four cargoes of Russia’s flagship Urals crude, totaling nearly 2.9 million barrels, but the last delivery arrived on August 9. No further shipments are expected for the remainder of the month, although this could still change, Bloomberg claims.
As of late July, Nayara, the third-largest refinery in India by capacity, was operating at nearly 70% of its full capacity. This figure could fall further if the refinery is unable to secure the necessary feedstock.
The challenges extend beyond crude shipments, as Nayara’s overseas sales of petroleum products are also facing difficulties. The refiner has relied on so-called dark fleet vessels to transport its exports, as legitimate shipowners and traders avoid dealing with the company due to EU sanctions.
Currently, two sanctioned medium-range tankers, Ocean Autumn and Varg, are docked at Nayara’s Vadinar terminal. These vessels are blacklisted by the UK, with Ocean Autumn also blacklisted by the EU, Bloomberg reports.
In addition to issues with foreign transactions, domestic shippers have also backed out of agreements with Nayara. The Great Eastern Shipping Co. Ltd. and Seven Islands Shipping Ltd. have both stopped collaborating with Nayara to transport fuel within India. In response, the company has turned to surface transport, such as trucks and rail, to move fuel.
The EU imposed sanctions on Nayara on July 18 for its support of Russia’s war in Ukraine through the Russian oil trade. Since the sanctions, Nayara has faced difficulties in issuing and receiving payments, and it has been forced to request advance payments or letters of credit before its shipments are loaded.
The company has been in talks with Indian government ministries to seek assistance, but New Delhi has not provided significant support.
The State Bank of India has also stopped processing trade and foreign currency transactions for Nayara, prompting the refiner to reach out to smaller banks like UCO Bank Ltd. to handle its transactions, according to Bloomberg.
Nayara operates a 400,000-barrel-per-day refinery and owns nearly 7,000 fuel outlets across India. It is also working on an integrated petrochemical plant next to its refinery. The company’s ownership is split between Rosneft and SPV Kesani Enterprises Co., with the remaining shares held by retail investors.
Earlier, it was reported that Russian oil producers are scrambling to reroute shipments of their flagship Urals crude to China after India, until recently one of Moscow’s biggest buyers, began scaling back purchases in the wake of new US trade penalties, Bloomberg reported.
