Saudi Aramco and Iraq’s state oil company SOMO have stopped selling crude oil to India’s Nayara Energy. This decision follows sanctions imposed on the Russian-backed refiner by the European Union in July, according to three sources with knowledge of the matter. This halt in supply from the two Gulf exporters has forced Nayara, which is majority-owned by Russian entities including the oil major Rosneft, to rely solely on Russia for its crude oil imports in August, as confirmed by sources and LSEG shipping data.
Nayara typically receives approximately 2 million barrels of Iraqi crude and 1 million barrels of Saudi crude each month. However, shipping data from Kpler and LSEG indicates that the company did not receive any shipments from either supplier during the month of August.
Payment Issues and Shift to Russian Supply
Two sources stated that the sanctions created payment problems for Nayara’s purchases from SOMO, though they did not provide further details. The most recent cargo of Basra crude from SOMO was discharged on July 29, and the last Saudi delivery, a shipment of Arab Light, arrived on July 18.
An official from the Russian Embassy in New Delhi confirmed last month that Nayara is now receiving direct supplies from Rosneft. Sources have also indicated that due to difficulties in selling its products as a result of the sanctions, the company is operating its 400,000 barrel-per-day refinery in western India at about 70-80% capacity.
Business Challenges and Leadership Change
Nayara Energy, which controls about 8% of India’s total refining capacity, has been struggling to transport its fuel since the EU sanctions were enacted. According to shipping reports and LSEG data, the company is now relying on so-called “dark fleet” vessels after other shippers withdrew. In a related development, the company’s CEO resigned in July, and last week, Nayara announced the appointment of a senior executive from Azerbaijan’s national oil company, SOCAR, as its new chief executive.
