- Saudi Arabia and Iraq suspend oil sales to Nayara Energy, increasing its dependence on Russian crude supplies.
- EU sanctions on Rosneft-linked firms restrict imports, forcing the refinery to focus more on India’s domestic market.
Saudi Arabia and Iraq suspend oil sales to Nayara Energy in India after the European Union’s latest sanctions package on Russia. The decision highlights how geopolitical restrictions are reshaping global crude trade.
Saudi Aramco and Iraq’s state oil marketer SOMO halted supplies following the EU’s 18th sanction package, adopted last month. The Vadinar refinery, partly owned by Russia’s Rosneft, now operates at reduced capacity while relying heavily on Russian oil shipments.
Located in Gujarat, the refinery has a daily capacity of 400,000 barrels. It accounts for 8 per cent of India’s refining strength and is the country’s second-largest plant. Yet sanctions have limited its export potential, forcing the company to focus largely on domestic fuel markets.
Transitioning further, industry reports suggest Nayara Energy’s crude imports dropped sharply. In August, volumes fell to an estimated 94,000 barrels daily, compared with 366,000 barrels last year’s third quarter. Analysts argue this marks the lowest import level since operations began.
Historically, Nayara Energy prioritised India’s local fuel market rather than exports. When it was exported, most sales involved jet fuel shipped to the United Kingdom. Britain remains outside EU sanctions, so restrictions have not directly blocked such trade. Nevertheless, tighter sanctions threaten to shrink future opportunities.
Additionally, the EU’s 18th sanction package extended measures to firms aiding Russia’s oil trade. These include bans, asset freezes, and restrictions on shadow fleet operators. By directly targeting Nayara Energy, Brussels underlined its opposition to Russian oil partnerships.
Therefore, Saudi Arabia and Iraq suspend oil sales not only in response to EU actions but also as a reflection of shifting market dynamics. This development raises questions about India’s reliance on Russian crude and its balancing act between global alliances.