Saudi Arabia’s Aramco and Iraq’s state oil firm SOMO have stopped selling crude oil to India’s Nayara Energy, after the European Union imposed sanctions on the Russian-affiliated refiner in July 2025
Nayara’s Vadinar refinery — with a 400,000 barrels-per-day capacity and accounting for about 8% of India’s refining — typically imported around 2 million barrels monthly from Iraq and 1 million from Saudi Arabia. These supplies did not arrive during August, forcing the refinery to rely exclusively on crude from Russia
The suspension stems mainly from payment complications triggered by the EU sanctions, according to multiple reports
Operational Impact
- Nayara’s refinery is currently operating at only 70–80% capacity, a significant drop due to limited crude and reduced product sales
- Transporting refined fuels has become difficult, as many shipping firms have withdrawn services. As a workaround, Nayara is resorting to using a shadow or “dark fleet” of tankers
- The refinery is now entirely dependent on Russian crude supplied by Rosneft, which holds a major stake in Nayara Reuters
Due to mounting challenges, Nayara’s CEO resigned in July, and the company has recently appointed a new CEO from Azerbaijan’s SOCAR
Why It Matters
| Key Aspect | Insight |
|---|---|
| Supply Disruption | A quarter of Nayara’s crude feed, traditionally from Iraq and Saudi Arabia, has been cut off, hurting operational stability. |
| Energy Security Stress | India is wrestling with the tension between sanctions-induced disruptions and its energy needs, escalating its reliance on Russian oil at a time when geopolitics is volatile. |
| Logistics Complexity | Sanctions have strained not just procurement but also downstream logistics, with shippers avoiding the refineries’ products. |
| Geopolitical Exposure | This case highlights how evolving global sanctions regimes can cascade to affect India’s key energy infrastructure. |
