India Criticises EU Sanctions Targeting Gujarat Refinery: ‘No Double Standards, Especially When…’

Nayara Energy's refinery in Vadinar, Gujarat, has become the first in India to be affected by Western sanctions. The European Union announced new restrictions on Russian oil exports on Friday, aiming to cut off funding for Moscow's military activities. This move marks a significant development in the ongoing geopolitical tensions.

India has expressed its stance on these unilateral sanctions. "India does not subscribe to any unilateral sanction measures. We are a responsible actor and remain fully committed to our legal obligations," stated an official response from the Indian government. This highlights India's commitment to maintaining its energy security and legal obligations.

EU Sanctions and Their Implications

The European Union's latest sanctions involve tightening the existing price cap on Russian oil, which is currently set at $60 per barrel. This measure restricts non-G7 countries from purchasing Russian oil if they wish to use Western shipping or insurance services. Additionally, 105 more vessels have been blacklisted, raising the total to 223 out of approximately 400 tankers suspected of aiding Russia in evading sanctions.

These actions aim to limit Moscow's ability to export oil and bypass price restrictions. The EU's strategy is designed to curb Russia's financial resources by targeting its oil export capabilities, which are crucial for funding its military operations.

Nayara Energy's Challenges

Nayara Energy, previously known as Essar Oil, was acquired in 2017 by Rosneft (holding a 49.1% stake), along with Trafigura and United Capital Partners (UCP), for $12.9 billion. With a refining capacity of 20 million tonnes annually, Nayara heavily depends on exports to Europe and Africa due to its limited domestic market presence of around 6,750 fuel stations.

The sanctions on products refined from Russian crude could severely impact Nayara's export markets, potentially disrupting operations and risking jobs in India. The company's reliance on international markets makes it vulnerable to these geopolitical developments.

Rosneft's Complicated Exit Strategy

The new curbs also complicate Rosneft's plans to exit its investment in India. Negotiations with Reliance Industries regarding the sale of Rosneft's stake have stalled due to Rosneft's high asking price of $20 billion. The sanctions now make it more challenging for Rosneft to repatriate profits, further complicating the potential deal.

India has emphasized that energy security is a critical responsibility for meeting citizens' basic needs. "We would stress that there should be no double standards, especially when it comes to energy trade," said Randhir Jaiswal, a spokesperson for India's foreign ministry.

This situation underscores the complexities faced by companies like Nayara Energy amid geopolitical tensions and evolving international policies. As global dynamics continue to shift, businesses must navigate these challenges while ensuring compliance with legal obligations and maintaining operational stability.