India’s Nayara Energy oil refinery, which came under European Union sanctions last month, has asked the government for help in solving its transportation problems.

Source: Reuters

Details: Following the imposition of sanctions, Nayara has faced mass contract cancellations from shipping companies. Some vessel owners have demanded early termination of agreements, while technology partners – including Microsoft – have temporarily suspended essential services.

As a result, the refinery has already been forced to reduce its oil processing volumes, and fuel deliveries to its branded petrol stations are now under threat. The Indian government is considering the use of India-flagged vessels to ensure domestic transport, but shipowners are concerned about potential risks, particularly the lack of insurance coverage.

India’s transport, energy, and foreign ministries are now involved in addressing the issue. A joint meeting is expected soon to find solutions.

Nayara Energy is one of India’s largest private oil refineries, with a stake held by the Russian company Rosneft.

Background:

• US tech giant Microsoft has suspended services to Nayara Energy, in which Rosneft holds a 49.13% stake.
• It was previously reported that the supertanker Kalliopi would deliver nearly 2 million barrels of Iraqi crude oil to India – the first such shipment since the EU sanctions on Nayara Energy were introduced.
• Nayara Energy recently appointed Sergei Denisov as its new CEO.
• Reliance, another major Indian refiner processing nearly 600,000 barrels of oil per day, has started shifting away from Russian crude following new EU sanctions targeting diesel produced from Russian oil.
• The second tanker changed its plan to load fuel at the Nayara refinery in India after the sanctions took effect.
• The oil tanker Talara, chartered by energy major BP, left the port of Vadinar – home to the Nayara Energy refinery – without loading any diesel.

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