Saudi Aramco and Iraq’s state oil marketing company SOMO have stopped selling crude oil to the Nayara Energy refinery in Vadinar, India, following the release of the European Union’s 18th sanction package on Russia, adopted last month.
Reuters reported, citing unnamed sources, that the refinery, in which Russia’s Rosneft has a 49.13% stake, was running at 70-80% of capacity because buyers are in tight supply after the sanctions. As for crude supply, Nayara Energy is processing only Russian oil supplied by its part-owner, according to the Reuters report, which cited LSEG data.
The Vadinar refinery has a capacity of 400,000 barrels daily and accounts for 8% of India’s total refining capacity. It is the second-largest refinery in the country. The latest European Union sanctions have been quite damaging for the facility with regard to exports. So the refinery has focused on the domestic market.
In fact, as Natalia Katona reported for Oilprice in mid-August, exports were never the priority for the Nayara Energy refinery. It was oriented towards the local fuel market from the start, and in exports, it mostly sold jet fuel to the UK, which is not party to the EU sanctions and has not yet imposed any restrictions on the Rosneft-owned refinery.
Even so, Bloomberg reported last month that Nayara Energy’s crude oil imports for the month were expected to drop to the lowest since it started operations, at an estimated 94,000 barrels daily. That compares with an average import rate of 366,000 barrels daily for the third quarter of last year.
In its 18th sanction package, the EU expanded sanctions on entities doing business with Russian oil, including via asset freezes, travel bans, and bans on providing resources. The bloc sanctioned Russian and international companies managing shadow fleet vessels, traders of Russian crude oil, and specifically Nayara Energy, a major customer of the Russian oil industry, in the face of its co-owner, Rosneft.
By Irina Slav for Oilprice.com
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