Saudi Arabia and Iraq halt oil supplies to Rosneft-affiliated Indian refinery following EU sanctions

Saudi Aramco and Iraq’s state-owned SOMO have stopped selling oil to India’s Nayara Energy, a refinery that is majority-owned by a consortium led by Russian state-controlled oil giant Rosneft, Reuters reports. EU restrictions introduced in July have effectively cut Nayara off from supplies sourced from the Persian Gulf.

In August, Nayara switched entirely to Russian crude. According to analytics platforms LSEG and Kpler, the company normally purchased about 2 million barrels of Iraqi oil and 1 million barrels of Saudi oil per month, but last month it did not receive a single shipment from either Middle Eastern country. The last deliveries from Iraq and Saudi Arabia date back to late July.

Two Reuters sources linked the suspension of supplies to settlement issues following the EU sanctions. Representatives of Nayara and SOMO did not respond to the agency’s request, while Saudi Aramco declined to comment.

Nayara’s refinery in Vadinar, Gujarat, with a capacity of 400,000 barrels per day, accounts for around 8% of India’s refining capacity. The plant is currently operating at 70–80% due to sales difficulties, with some of its fuel being shipped via the “shadow fleet” after traditional carriers withdrew.

In July, Nayara’s CEO resigned, and last week the company announced the appointment of a new head, a senior executive from Azerbaijan’s SOCAR.

Earlier, U.S. presidential senior advisor for trade and industry Peter Navarro stated that India could achieve a 25% reduction in American tariffs if it stopped purchasing Russian oil. According to Navarro, New Delhi has made it clear that it does not intend to change its stance. Navarro emphasized that Russian oil exports help finance the war against Ukraine.

Bloomberg reported that India’s largest refineries plan to reduce their Russian oil purchases starting in October to 1.4–1.6 million barrels per day, down from 1.8 million in the first half of the year. Meanwhile, in July, India became the largest supplier of diesel to Ukraine, accounting for over 15% of the country’s total imports.