Nayara Energy, the Indian refiner in which Russia’s oil giant Rosneft holds 49%, is set to import in August the lowest volume of crude ever as the EU sanctions cripple procurement plans and sales of refined petroleum products.
Nayara Energy is expected to import just 94,000 barrels per day (bpd) of crude this month, Bloomberg reports, citing ship-tracking data and trade sources.
The August import volumes are set to be the lowest in the history of the refinery, India’s second-largest, with a capacity to process 400,000 bpd, and would compare to average import levels of about 366,000 bpd for the period July to September 2024.
Nayara Energy has so far imported almost 2.9 million barrels of Russia’s flagship Urals crude grade in August, but currently no shipments are planned for the rest of the month, per vessel-tracking data and a shipbroker cited by Bloomberg.
The Indian refinery’s troubles began last month when the EU adopted the 18th sanctions package against Russia, targeting a hundred more ‘shadow fleet’ tankers, energy trade, and traders and banks enabling it.
In a first move against customers of Russian oil, 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 a major customer of the shadow fleet – the Nayara Energy refinery in India with Rosneft as its main shareholder.
Although analysts had questioned the effectiveness of the EU sanctions without U.S. support, it appears that traders aren’t risking breaching the EU sanctions, and they steer clear of Nayara’s product sales. Several cargoes from Nayara’s fuel export terminal have been canceled in recent weeks due to the sanctions.
The refiner is forced to use dark fleet vessels to move the fuel it has produced from refining Russian crude to customers in jurisdictions such as China and other Asian countries.
By Tsvetana Paraskova for Oilprice.com
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