Nayara Energy Ltd., India’s second-largest private refiner, has seen crude oil shipments from Saudi Arabia and Iraq come to a standstill following European Union sanctions.
The sanctions, imposed in July due to Russian oil major Rosneft PJSC’s 49% stake in the company, have triggered payment and shipping challenges for Nayara, leaving it increasingly reliant on Russian crude.
Saudi and Iraqi crude supplies cut off
Saudi Aramco has stopped selling crude to Nayara, citing payment issues linked to sanctions, reported Reuters.
Similarly, Iraq’s state oil marketer SOMO did not send any shipments to the company in August.
Shipping data confirm that Nayara last received deliveries of Arab Light crude on July 18 and Basrah Heavy on July 29.
Typically, the refiner receives around 2 million barrels of Iraqi crude and 1 million barrels of Saudi crude each month.
But in August, none of these barrels arrived, marking a sharp shift in supply patterns.
Data from analytics firms Kpler and LSEG show that the last cargo of Basrah crude was discharged at Vadinar port on July 29, while the last Saudi delivery took place mid-July.
Reliance on Russian oil deepens
With Middle Eastern supplies halted, Nayara has become completely dependent on Russian crude, specifically the Urals grade.
In August, the company imported an average of 242,000 barrels a day, its lowest level since November 2022, against a refinery capacity of 400,000 barrels a day.
The reduction in processing rates reflects operational strain under sanctions, with Nayara now running its Gujarat-based plant at roughly 70–80% of capacity.
The EU penalties have complicated the company’s access to banking channels and shipping services.
Nayara has been forced to rely on a so-called dark fleet of tankers after conventional shipping firms pulled back.
These measures underscore the increasing isolation of the refiner in global markets, even as Russia continues to directly supply crude, according to officials from the Russian Embassy in New Delhi.
Last month, Nayara’s imports contributed to India’s overall Russian oil purchases rising by 88,000 barrels per day to a total of 1.69 million barrels a day.
While discounted Russian oil remains attractive, the reliance highlights India’s delicate balancing act between securing affordable energy supplies and navigating mounting international pressure.
Government and leadership challenges
Nayara has reached out to the Indian government for assistance in identifying banking and shipping solutions to maintain crude and product flows.
However, New Delhi faces its own geopolitical challenges as US President Donald Trump escalates pressure on India to reduce discounted Russian oil imports.
The US has imposed 50% tariffs on Indian goods, complicating the energy and trade landscape further.
Internally, Nayara has also faced leadership changes, with its chief executive resigning in July.
The company has since appointed a senior executive from Azerbaijan’s national oil company SOCAR as its new CEO, in a move aimed at stabilizing operations.
As the company adjusts to sanctions, disrupted supply chains, and a reliance on Russian crude, its position highlights the broader complexities facing India’s refining sector in a shifting global energy market.
The post Saudi Arabia and Iraq halt crude shipments to Nayara Energy amid EU sanctions appeared first on Invezz