ARAMCO and SOMO halt supply to India’s Nayara Energy post EU sanctions

Saudi’s Aramco and Iraq’s SOMO have halted supply to India’s Nayara Energy, Reuters reported. This comes as the aftermath of sanctions imposed by the EU on the Russian backed refiner as part of a package targeting entities linked to Russian oil.

Nayara Energy is majority-owned by Rosneft, a Russian state-owned oil company, with a 49.13% stake, and the remaining shares are held by a consortium of international investors including Trafigura and UCP.

According to reports, Nayara- which typically receives around 2 million barrels of Iraqi crude and 1 million barrels of Saudi crude each month, did not receive shipments from either of the two suppliers during August.

Data from analytics firms Kpler and LSEG show that the last cargo of Basrah crude was discharged at Vadinar port on July 29, while the last Saudi delivery took place mid-July.

This halt from two major Gulf suppliers meant that the refiner has relied majorly on Russia for its crude oil imports in August.

As per reports, Nayara Energy which controls about 8% of India’s 5.2 million barrel per-day refining capacity has been struggling ever since the EU sanctions which were imposed in July, earlier this year. In an earlier media statement, Rosneft Oil had termed the EU sanctions to be unjustified and illegal. Rosneft had also stated that it is not a controlling shareholder of Nayara Energy.

“The imposition of sanctions against the refinery directly threatens India's energy security and will have a negative impact on its economy,” it stated.