Nayara Energy Ramps Up Refinery Operations to 93% Using Russian Crude Amid Sanctions

Nayara Energy's refinery in Vadinar is now operating at 90% to 93% of its capacity, a significant increase from the 70% to 80% levels seen after the European Union imposed sanctions in July. Prior to these sanctions, the refinery, with a capacity of 400,000 barrels per day, was running above its stated capacity at 104%. The company is majority-owned by Russian entities, including Rosneft, which holds a substantial 49.13% stake and was recently sanctioned by the United States.

Despite broader market reactions, including major Indian refiners like Reliance Industries halting purchases of Russian oil following the US sanctions, Nayara Energy has resumed operations using exclusively Russian crude. This oil is reportedly arranged by Rosneft and supplied to Nayara through trading firms. Sources suggest that Nayara is likely to continue sourcing Russian oil via non-sanctioned entities, potentially settling payments against product exports as previously reported. Meanwhile, Nayara is also increasing its domestic fuel sales, supplying products to companies like Hindustan Petroleum Corp. Nayara Energy operates a vast network of over 6,600 retail fuel outlets across India.

Impact: This news is significant for the Indian stock market and Indian businesses, especially in the energy sector. Nayara Energy's increased capacity utilization and reliance on Russian crude oil amidst international sanctions could influence domestic fuel availability and pricing. It also highlights how Indian companies are navigating complex geopolitical supply chains. The news impacts India's energy security and its trade relations. Rating: 7.