EU sanctions disrupt exports from Indian refinery linked to Russia

Shipowners and oil traders have begun to distance themselves from the Russian-backed Indian company Nayara Energy Ltd. after it was included in the latest package of European Union sanctions. This was reported by Bloomberg, writes UNN.

DetailsAccording to the publication, at least one tanker – Talara – turned around and left the port of Vadinar on Sunday. According to ship brokers, the vessel was supposed to pick up a cargo of fuel – probably diesel fuel – from Nayara, but the booking was canceled after the sanctions imposed on Friday, and the cargo was never loaded.

Brokers add that this week, shipowners have begun to be cautious about any operations with Nayara – both fuel exports and oil imports. Rosneft owns 49.13% of the Indian refiner’s shares.

The vessel Talara is currently on standby off the coast of India. Its refusal to load has heightened concerns around Nayara, which, according to traders, has begun to demand prepayment or letters of credit even before loading fuel.

According to traders, such demands may indicate concerns about payment complications after shipment or other financial difficulties. This causes concern in the market: participants doubt whether they will be able to participate in future Nayara tenders, as the industry standard remains payment 15-30 days after loading.

Global oil market observers are monitoring the situation, trying to understand whether this caution on the part of shipowners will also extend to traders and financial institutions.

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In recent days, Indian refiners have been appealing to the EU for clarification on sanctions against Nayara and the ban on the supply of diesel fuel made from Russian oil.

Shipowners in Greece, Norway, and other European countries control a significant portion of the world’s fleet, and are likely to adhere to European sanctions to some extent. At the same time, since the beginning of the full-scale war in Ukraine in 2022, Greek shipowners have played a key role in transporting Russian oil, especially when its cost remained below the established price cap.

In response to the sanctions, Nayara stated that it is exploring legal and other options to protect its interests, and Rosneft called the EU sanctions “unjustified and illegal.”

As Reuters notes, Nayara in its statement on Monday called the EU sanctions “unfair and unilateral,” emphasizing that the company operates within Indian law. The Indian government also expressed disagreement with Brussels’ decision, stating that it does not recognize unilateral sanctions that were not adopted within the UN.

AdditionNayara Energy is one of two private fuel exporters in India. It is partly owned by the Russian company Rosneft, which is under numerous Western sanctions due to the war against Ukraine.

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