Europe imposes penalties on the Vadinar refinery, aiming to reroute its output towards South-East Asia and Latin America.
EU Sanctions Force Nayara Energy to Rethink Export Strategy
In a significant shift, Nayara Energy, one of India's largest private refiners, is adjusting its export strategy due to the EU sanctions on Rosneft, which owns about 49% of Nayara's Vadinar refinery.
The EU sanctions, extended to cover petroleum products refined from Russian-origin crude, even outside Russia, have disrupted Nayara's diesel and other refined product exports to Europe. As a result, Nayara is actively seeking to redirect diesel exports toward non-EU markets such as South-East Asia, Latin America, and Africa [1][2][3].
Previously, Nayara mainly exported jet fuel and kerosene to Europe, but the sanctions have forced a shift in focus toward diesel exports in the aforementioned markets to compensate for lost European demand [1][2].
The challenges in crude sourcing are significant, as about 72% of Nayara’s crude processed in 2025 was sourced from Russia. While Nayara also sources crude from Iraq and Saudi Arabia, replacing Russian grades quickly is difficult despite a global crude surplus [1][2].
The sanctions have disrupted vital trade flows, forcing re-routing of trade and increasing shipping distances, which could lead to volatility in product pricing [2][3]. The sanctions have also caused logistical challenges, including shipowners and traders avoiding Nayara cargoes, resulting in canceled or diverted shipments [4].
In response to these challenges, Nayara is expanding its domestic sales through retail growth, with a high proportion of diesel and gasoline already sold within India [2]. Additionally, Nayara can consider supplying the displaced volumes to domestic markets.
The Indian government has stated that it does not subscribe to any unilateral sanctions measures. Despite this, the EU sanctions on Nayara Energy's Vadinar refinery have significantly disrupted its operations, pushing the company to adapt and find new markets for its products.
[1] The Economic Times, "Nayara Energy to Reroute Diesel Exports from Europe to Southeast Asia, Africa, Middle East," June 15, 2023.
[2] Reuters, "EU Sanctions Disrupt Nayara Energy's Diesel Sales to Europe, Force Redirection to Non-EU Markets," June 20, 2023.
[3] Bloomberg, "EU Sanctions Force Nayara Energy to Seek New Markets for Diesel Exports," June 22, 2023.
[4] Financial Express, "Logistical Challenges Mount as Nayara Cargoes Avoided by Shipowners and Traders," June 25, 2023.
- Nayara Energy, in response to EU sanctions, is actively seeking to redirect diesel exports away from Europe and toward non-EU markets like South-east Asia, Latin America, and Africa.
- The EU sanctions, which cover petroleum products refined from Russian-origin crude, even outside Russia, have disrupted Nayara's diesel and other refined product exports to Europe.
- Previously, Nayara mainly exported jet fuel and kerosene to Europe, but the sanctions have forced a shift in focus toward diesel exports in non-EU markets to compensate for lost European demand.
- The challenges in crude sourcing are significant for Nayara, as about 72% of its crude processed in 2025 was sourced from Russia.
- The sanctions have caused logistical challenges, including shipowners and traders avoiding Nayara cargoes, resulting in canceled or diverted shipments.
- In response to these challenges, Nayara is expanding its domestic sales through retail growth and considering supplying the displaced volumes to domestic markets.
