Nayara Energy, operator of India’s second-largest refinery, has ramped up its oil deliveries by train as export markets shrink.
Per a Reuters report, the refiner, which is 49% owned by Russia’s Rosneft, has been loading between two and three trains of 50 tanker cars each every day since late August, after in July the European Union slapped individual sanctions on the company for sourcing its crude oil from Russia.
The EU measures aim to further restrict Kremlin oil revenues, much of which now flows via discounted sales to Asia. Following the sanctions, Nayara asked New Delhi for help securing compliant banking channels and shipping for both crude and products.
The sanctions sapped imports of Saudi and Iraqi crude for the Nayara Energy refinery in Vadinar, and decimated the facility’s oil supply in August. Since then, however, it appears that things have started to turn around. Nayara Energy worked with Indian banks to start paying for its supply of Russian crude in rupees rather than sanction-sensitive currencies, and it focused its attention on the domestic market instead of exports.
The company supplies more than 6,500 fuel stations in India, Bloomberg reported recently, and has started selling more to a fellow refiner, Hindustan Petroleum Corp. Nayara Energy has also started loading more crude into floating storage and using tankers under Western sanctions to export its fuels.
The Indian government is helping by providing tanker cars for the shipments and coastal vessels for transport of fuels from Nayara Energy to consumers by sea, Reuters reported today, citing unnamed sources from New Delhi and the company itself. The Modi government, according to these sources, is careful with what and how much help it provides as trade talks with the U.S. continue and the threat of more U.S. action against India remains in the air.
By Irina Slav for Oilprice.com
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