India’s Nayara Energy, which processes Russian oil, has completed a planned turnaround of its 400,000-barrels-per-day refinery at Vadinar, the Indian refiner said on Thursday.
Nayara Energy, in which Rosneft holds 49% and which has been processing only Russian oil for months after the EU sanctions on the company, could boost fuel supply to the Indian market in the coming weeks.
The refiner has pivoted to supply the domestic market to avoid the EU sanctions from the summer of 2025 on Nayara Energy because of the Russian ownership. Apart from the sanctions on the refiner, the EU now has a policy not to allow fuel products made of Russia-origin oil.
The return to operations of Nayara Energy’s major refinery could boost competition in India for Russian crude, which is exempted from U.S. sanctions until June 17 via a waiver for already loaded cargoes.
The restart of the refinery after the maintenance could also increase fuel supply in India, which has scrambled through the Middle East crisis with four fuel price hikes so far, and reduced fuel consumption.
Analysts have slashed their estimates of India’s oil demand growth this year, with the consumption uptick to be the weakest since the Covid pandemic as the supply crunch and higher fuel prices slow gasoline and diesel demand.
Analysts Kpler and Rystad Energy have slashed their gasoline and diesel demand growth estimates for this year by between 30% and 90%, according to figures cited by Bloomberg earlier this week.
Despite the major downward revisions to fuel demand growth in the world’s third-biggest crude oil importer, analysts don’t see this year’s growth slowdown as a structural decline. They expect India’s oil demand to rebound when the Middle East crisis is resolved, unlike in China, where forecasts and figures pointed to structurally falling road fuel demand even before the Iran war began.
By Tsvetana Paraskova for Oilprice.com
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