Troubles mount! Russia-backed Indian oil refinery reels from EU sanctions blow; Nayara faces new challenges as shippers look to end contracts
EU sanctions on Russia oil have started causing troubles for Russia-backed Indian refinery Nayara Energy. After news of shipping operators showing reluctance to work with Nayara and Microsoft’s abrupt suspension of IT services for the company, it has come to light that shippers have asked to end contracts.Nayara Energy, operates India’s third-largest refinery and supplies petroleum products both domestically and internationally. It is majority owned by Russian organisations, including the oil giant Rosneft.The new European Union sanctions announced on July 18, aimed at Russia and its energy sector due to the ongoing conflict in Ukraine, have significantly impacted Nayara’s operations.
Nayara Energy Hit Badly By EU Sanctions
According to a Reuters report, Nayara Energy has had to scale down activities at its 400,000-barrels-per-day refinery because of limitations in fuel storage capacity.Now, three shipowners engaged by India’s Nayara Energy have requested termination of their vessel contracts with the company,six sources with knowledge of the situation told Reuters.Also Read | EU sanctions on Russia oil: Indian arm of UAE-based shipping company takes a hit; Indian-origin captain of crude oil tanker faces sanctionsTwo prominent Indian shipping companies, Seven Islands Shipping Ltd and Great Eastern Shipping Co (GESCO), have requested Nayara to terminate contracts for three clean products tankers, citing sanctions-related issues, according to sources quoted in the report.The vessels in question include two medium-range ships, Bourbon and Courage, operated by Seven Islands, whilst GESCO has requested the return of its vessel, Jag Pooja, the report said.Nayara, headquartered in Mumbai, has expressed opposition to EU sanctions, describing them as “unjust and unilateral”.According to data from analytics company Kpler, the vessel Bourbon is stationed near India’s western Vadinar port, adjacent to Nayara’s refinery. Meanwhile, Courage and Jag Pooja remain positioned off the ports of Kochi and Ennore, respectively.According to Reuters, sources and LSEG data indicated that Sanmar Songbird, a vessel chartered by state-owned Hindustan Petroleum Corp, was originally set to collect gasoline from Nayara on Tuesday. However, the vessel has been redirected to collect from Mangalore Refinery and Petrochemicals Ltd instead.Also Read | Russia oil trouble hits: Shipowners and oil traders avoiding Russia-backed Nayara Energy in India; impact after EU sanctionsThe route change occurred because of imposed restrictions and insufficient insurance coverage for the journey, the sources said.Since Russia began its full-scale military operation in Ukraine in early 2022, India has emerged as the primary buyer of Russian seaborne crude oil.Reuters reported last week that a vessel carrying Russian Urals crude changed course from Nayara’s Vadinar port after the EU sanctions announcement, whilst two additional vessels cancelled loading refined products at the facility.
Multiple Troubles For Nayara
After it was hit by EU sanctions, Nayara’s CEO Alessandro des Dorides resigned. The company appointed Sergey Denisov as its new chief executive. A longstanding executive who joined Nayara in 2017, Denisov succeeds des Dorides, whose brief tenure as CEO began in April 2024 but concluded due to increased regulatory scrutiny over the company’s connections with Russian petroleum giant Rosneft.Nayara Energy’s Indian refinery has also been forced to tie-up with local IT service provider Rediff.com after Microsoft withdrew its support following new sanctions imposed on Russian oil.Also Read | EU sanctions hit Russia-backed Nayara hard! Indian refinery switches to local firm after Microsoft suspends services; here’s what’s happeningNayara employees have lost access to Microsoft’s Outlook email and Teams messaging services since last Tuesday when the tech giant terminated its relationship with the company.While employees can now communicate internally using Rediff.com’s platform, they are unable to retrieve their historical communications and emails stored on Microsoft’s cloud servers.Nayara has reportedly filed a legal case against Microsoft at the Delhi High Court on Monday, challenging the company’s decision to discontinue services.
