Three vessels chartered by India’s Nayara Energy have sought to terminate their contracts, pressured by EU sanctions imposed on the Russian-owned refiner, according to a Reuters report on Wednesday.
Nayara Energy, a significant player in India’s energy sector, is majority-owned by Russian entities, notably including the oil major Rosneft.
The company operates India’s third-largest oil refinery, a crucial asset in the country’s energy infrastructure.
This refinery not only meets domestic demand for refined petroleum products but also plays a vital role in India’s export market for these goods.
Through its operations, Nayara Energy contributes significantly to both India’s energy security and its presence in the global refined products trade.
Operations hit
Nayara Energy’s operations have been significantly disrupted by new European Union sanctions, imposed on July 18, targeting Russia’s energy sector due to the ongoing conflict in Ukraine.
The company has reportedly been compelled to scale back operations at its 400,000-barrels-per-day refinery, primarily due to limitations in fuel storage capacity, as previously reported by Reuters.
Seven Islands Shipping Ltd and Great Eastern Shipping Co, both India-based companies, have requested Nayara to release three clean products tankers from their contracts due to concerns regarding sanctions, according to the report.
Seven Islands is requesting the release of its medium-range vessels, Bourbon and Courage. Simultaneously, GESCO has sought the return of the Jag Pooja.
Data from analytics firm Kpler indicates that the Bourbon is anchored near Vadinar port, the location of Nayara’s refinery in western India. Meanwhile, the Courage and Jag Pooja are floating off the ports of Kochi and Ennore, respectively.
Meanwhile, Sanmar Songbird, a tanker chartered by Indian state refiner Hindustan Petroleum Corp, was initially slated to load gasoline from Nayara on Tuesday, according to sources and LSEG data quoted in the report.
However, the vessel has since been redirected to load from Mangalore Refinery and Petrochemicals Ltd.
They attributed the diversion to sanctions and the unavailability of insurance coverage for the journey.
Strong disapproval
Nayara Energy had previously expressed strong disapproval of the European Union’s sanctions, characterizing them as “unjust and unilateral.”
This criticism underscores a fundamental disagreement with the EU’s approach to international relations and the imposition of economic penalties.
Following the EU sanctions announcement, reports last week stated that a tanker carrying Russian Urals crude was diverted from Nayara’s Vadinar port. Additionally, two other tankers reportedly did not load refined products there.
In the aftermath of the new sanctions, Nayara’s CEO resigned. The company subsequently initiated a court case in India against Microsoft, after the US software giant suspended its services to Nayara.
Since early 2022, following its full-scale invasion of Ukraine, Russia has seen a significant shift in its crude oil export landscape.
India has emerged as the largest importer of Russian seaborne crude, a development that reshaped global energy trade flows.
This increased reliance on Russian oil by India is a direct consequence of Western sanctions and boycotts against Moscow, which led to discounted prices for Russian crude, making it an attractive option for energy-hungry nations like India.
The strategic pivot has not only provided a vital market for Russian oil but has also allowed India to secure its energy needs at a competitive rate, despite the geopolitical complexities.
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