European Union’s latest round of sanctions on Russian oil have already begun to hit a refinery in India. Oil companies and vessel operators are distancing themselves from India’s Nayara Energy Ltd., following the European Union’s recent sanctions that specifically targeted the company. According to shipbrokers, vessel operators have become hesitant to engage with Nayara this week, whether for exporting refined products or importing crude oil. The Indian refinery has Rosneft PJSC as a significant shareholder, holding a 49.13% stake.Ship-tracking information from Bloomberg revealed that a vessel called the Talara reversed course and departed from Vadinar port on Sunday. According to shipbrokers, the vessel was scheduled to collect a fuel shipment, presumably diesel, from Nayara. However, the scheduled collection was cancelled in response to Friday’s sanctions, leaving the cargo unloaded.Tracking data and charter arrangements indicate that another vessel, the Chang Hang Xing Yun, stopped off India’s southwestern coast whilst en route to Vadinar this week.Also Read | Russia oil squeeze: Trump’s 100% tariff threat – should India panic?The vessel has now redirected towards the Arabian Gulf to collect shipments destined for southern Africa, after its planned loading at Vadinar was cancelled yesterday, as reported by shipbrokers.
Impact of EU Sanctions on Russia
Shipping companies from Greece and Norway dominate the international maritime fleet, and these organisations are expected to comply with EU regulations. Since the conflict in Ukraine began in 2022, Greek vessel operators have been instrumental in facilitating Russian oil transportation, particularly for shipments priced below the cap.Market analysts are observing the global oil sector to determine if vessel operators’ reluctance extends to trading partners and financial institutions. In recent days, refineries in India have requested additional clarification from the European Union regarding various issues, including Nayara’s sanctions and restrictions on diesel produced from Russian oil.Also Read | Trump, NATO tariff threat on Russia’s crude oil: India not worried about sanctions, says Hardeep Puri; ‘if something happens, we’ll…’The redirection of Talara has heightened apprehensions about Nayara, following its requirement for upfront payments or letters of credit prior to fuel loadings.Industry sources indicate this requirement might reflect worries about payment complications post-loading, amongst other financial issues. This stipulation has created uncertainty among market participants regarding future participation in the refiner’s tenders, as the standard industry practice involves payments occurring 15-30 days after cargo loading.Nayara has indicated it is investigating legal and alternative measures to safeguard its interests, whilst Rosneft has described the EU sanctions as “unjustified and illegal.”Also Read | Russia oil sanctions: EU moves on crude, oil price cap may hit Reliance, Nayara; enforcing may be difficult, India may still benefit
