Russia-backed Indian refiner Nayara Energy has reduced operations at its 400,000-barrel-per-day refinery in the aftermath of new European Union sanctions that targeted the firm, five sources familiar with the matter said.
Privately-held Nayara, which runs India’s third-biggest refinery at the port of Vadinar in the western state of Gujarat, controls nearly 8% of the country’s total refining capacity of about 5.2 million bpd.
The sanctions package unveiled on July 18 against Russia and its energy sector has made it tougher for Nayara to export its refined products, resulting in storage constraints, two of the sources said.
Since the EU curbs on Nayara, traders have grown cautious in dealing with its fuel, trade and industry sources say.
Last week, Reuters reported that at least two tankers skipped planned loadings at Vadinar while a tanker carrying a cargo of Russian crude was diverted away from the refiner.
One source said Nayara was operating the refinery at 70% of capacity, while another put the figure at 80%.
Nayara ran at more than 100% of its nameplate capacity in each of the three months through June, the most recent government data shows.
All the sources sought anonymity because they were not authorised to speak to the media. Nayara did not immediately respond to a request for comment.
Nayara typically exports at least four million barrels of refined products each month, including diesel, jet fuel, gasoline and naphtha, through traders.
India has become the biggest buyer of seaborne Russian crude in the aftermath of Moscow’s Ukraine invasion. Nayara, majority-owned by Russian entities including Rosneft, is a key buyer of Russian oil.
Nayara’s chief executive resigned after the sanctions and was replaced by Sergey Denisov, who had been its chief development officer, Reuters reported on Friday.
On Monday, Nayara said it filed legal proceedings against U.S. software giant Microsoft following its suspension of services to the refiner.
Nayara, based in the commercial capital of Mumbai, operates more than 6,000 fuel stations.
