Nayara seeks India’s help to ship fuel as EU sanctions disrupt operations

By Admin

08 Aug, 2025

Severe Disruptions in Fuel Supply
Nayara Energy’s fuel supply chain has hit a major roadblock after shipowners, wary of European Union (EU) sanctions, stopped lifting products from the company’s Vadinar refinery in Gujarat. The Rosneft-backed refiner, which heavily depends on marine transport rather than pipelines, is struggling to deliver petrol and diesel to key consumption hubs across Maharashtra, Karnataka, Andhra Pradesh, Tamil Nadu, and Odisha.

Government Assistance Sought
On Thursday, Nayara executives met with officials from India’s shipping ministry, requesting help in arranging vessels to restore supply operations. The company typically requires three ships to maintain its fuel distribution network but has managed to secure only one vessel since the EU sanctions came into force, limiting it to a single voyage.

Challenges Beyond Shipping
Indian shipping lines have withdrawn from contracts with Nayara due to its Russian ownership links, making it difficult for vessels to secure insurance from Protection and Indemnity (P&I) clubs, most of which are based in Europe. Nayara is now exploring ways to enable Indian shipping lines to operate under domestic insurance coverage, coordinated with local insurers. However, the Directorate General of Shipping has emphasized that a political decision may be necessary to resolve the matter.

Leadership Changes Amid Sanctions
The EU’s sanctions part of its 18th package aimed at curbing Russia’s revenue streams have also triggered a wave of resignations in Nayara’s leadership. CEO Alessandro Des Dorides stepped down within days, followed by European directors Victoria Cunningham, Avril Mary Anne Conroy, Jorg Tumat, and senior VP & head HSE Barbara Oberhauser. Nayara has condemned the EU’s move as “unjust and harmful to India’s interests” and is considering legal options. Its part-owner Rosneft, holding 49.13% equity, has also called the sanctions “unjustified” and a “direct threat to India’s energy security.”

Wider Impact on India’s Oil Sector
The sanctions coincide with rising global pressure, including the US decision to double tariffs on Indian goods to 50% in response to India’s continued crude imports from Russia. While the Indian government has not directed refiners to cut Russian imports, the shrinking discounts on Russian crude now below $2 per barrel may encourage diversification.

India currently imports around 5 million barrels of crude daily, with Russia supplying over 1.6 million barrels in July, up from less than 0.2% before the Ukraine conflict. The EU’s upcoming ban on petroleum products derived from Russian crude, effective January 2026, could further challenge Indian refiners like Nayara and Reliance, who have been key suppliers to Europe.

Looking Ahead
As the crisis unfolds, Middle Eastern suppliers may regain their dominant role in India’s oil import mix. For Nayara Energy India’s second-largest refinery operator with over 6,750 petrol pumps the path forward will depend on securing stable shipping arrangements and navigating a complex geopolitical environment that is reshaping global energy trade.