EU sanctions Nayara’s Gujarat refinery over Russian oil ties; India says it won’t accept double standards

India strongly objected to the move, calling it unilateral and defending its right to trade freely in the energy sector.

In a first, the European Union (EU) has imposed sanctions on an Indian oil refinery, Nayara Energy’s Vadinar refinery in Gujarat, over its ties to Russia. The move is part of the EU’s latest round of restrictions targeting Russian oil exports in an effort to cut off funding for Moscow’s war in Ukraine.

Nayara Energy is partly owned by Russia’s state-run oil giant Rosneft, which holds a 49.1 percent stake in the company. The refinery was acquired in 2017 from Essar Oil by Rosneft and its partners, including global commodities trader Trafigura and Russian investment firm UCP, in a $12.9 billion deal.

Why the EU sanctioned Nayara

According to the EU’s foreign policy chief Kaja Kallas, the Vadinar refinery is one of the biggest Rosneft-linked operations outside Russia.

“For the first time, we’re designating a flag registry and the biggest Rosneft refinery in India,” she said while announcing the new curbs.

The sanctions are aimed at tightening the global price cap on Russian oil. So far, countries outside the G7 can purchase Russian oil below a $60 per barrel threshold, while still accessing Western shipping and insurance services. The EU has now lowered this cap further, saying the existing level had become ineffective.

In addition, the EU sanctioned 105 more 'off-radar' oil tankers, taking the total to 223. These vessels are part of what is known as a 'shadow fleet' used to quietly move Russian oil around the world.

India pushes back

India strongly objected to the move, calling it unilateral and defending its right to trade freely in the energy sector.

“We do not subscribe to any unilateral sanction measures,” said foreign ministry spokesperson Randhir Jaiswal.

“There should be no double standards, especially when it comes to energy trade. Energy security is critical for meeting the basic needs of our citizens,” he added.

What this means for Nayara

The sanctions could impact Nayara in several ways:

• Exports could be hit, especially to Europe and Africa, which are key markets for the refinery
• Operations may slow down if access to Western logistics or insurance is restricted
• It could become harder for Rosneft to sell its stake or repatriate profits, both already complicated due to earlier sanctions
• There could be a threat to jobs and business continuity if the situation escalates

Nayara operates one of India’s largest private refineries, with a capacity of 20 million tonnes per year, as per a report by Times of India. However, it has a small domestic retail network of around 6,750 petrol pumps, making it dependent on exports.