Sanctions Push India's Nayara Energy to Rely on Russian Oil

Saudi Arabia's Aramco and Iraq's SOMO have halted crude oil supplies to India's Nayara Energy refinery after EU sanctions were imposed in July due to its ties with Russia. Nayara, whose controlling stake is owned by Russian companies including Rosneft, was entirely dependent on supplies from Russia in August, according to LSEG data and sources.

Nayara used to receive about 2 million barrels of Iraqi oil and 1 million barrels of Saudi oil per month, but in August, there were no supplies from these countries, according to Kpler and LSEG data. The last batch of Basra oil from SOMO was unloaded on July 29 at Vadinar port by the tanker Kalliopi, and the last Saudi supply of 1 million barrels of Arab Light was on July 18 by the tanker Georgios.

Sources noted that the sanctions have created problems with payments for SOMO's oil. The Indian company, which controls 8% of the country's refining capacity (5.2 million barrels per day), has reduced work at the Vadinar refinery to 70–80% due to sales difficulties caused by the sanctions. The company has switched to using a "shadow fleet" for fuel transportation, as other carriers have refused to cooperate.

To recall, a representative of the Russian Embassy in New Delhi confirmed last month that Nayara receives oil directly from Rosneft.

In August, US President Donald Trump signed an executive order imposing an additional 25% tariff on goods imported from India. The reason is the Indian government's direct and indirect import of oil from Russia, as well as the resale of a significant part of these purchases on the open market.

The tariffs have affected a number of Indian goods, including clothing, textiles, precious stones, shoes, and furniture. The US has also called on European countries to join it and start joint pressure on India, which, it should be recalled, was considered one of the closest US allies in Asia.