India’s Nayara Energy has managed to navigate one of the toughest sanction environments in its history — and instead of slowing down, the Rosneft-linked refiner is now importing record volumes of Russian crude. Despite tightened EU and U.S. restrictions, crude intake at Nayara’s 400,000-b/d Vadinar refinery has surged to 420,000 b/d in November, exceeding the facility’s nameplate capacity.
From Sanction-Induced Collapse to a Strong Rebound
When EU and U.S. sanctions hit Nayara’s operations in August, crude intake plunged to 240,000 b/d, its lowest in months. Iraqi and Saudi suppliers refused to ship contracted volumes, leaving Vadinar dependent solely on Russian grades.
But by October, Nayara had reversed the decline.
- October intake: 390,000 b/d
- November intake: 420,000 b/d (105% of capacity)
Remarkably, even after the U.S. sanctions wind-down deadline of November 21, Russian cargoes continued arriving. Two Aframax tankers loaded with Rosneft crude from Ust-Luga docked at Vadinar on November 22 and 24, signalling business as usual.
EU and U.S. Sanctions Triggered the Crisis
The chain reaction began in July, when the EU sanctioned Vadinar due to its reliance on Russian crude and Rosneft’s 49% stake in Nayara.
Consequences included:
- Serious logistical disruptions
- Vessel owners refusing charters
- Sharp utilisation cuts at the refinery
- A collapse in crude availability from non-Russian suppliers
October’s U.S. sanctions on Rosneft were expected to worsen the situation, yet Nayara instead scaled up operations.
Domestic Market Becomes Key Safety Valve
A major challenge for Nayara wasn’t sourcing crude — it was finding buyers for its products once Europe became inaccessible.
Nayara tapped its 6,500-station retail network (with 400 more planned), boosting domestic fuel sales. In October, domestic deliveries reached almost 100,000 b/d, supported by unexpected demand from Hindustan Petroleum Corporation (HPCL), whose Mumbai refinery faced operational issues due to contaminated domestic crude. Nayara stepped in, sharply increasing shipments of gasoline and gasoil.
New Export Markets Emerge: Brazil, Turkey, and Sudan
With the domestic buffer in place, Nayara diversified aggressively overseas.
Notable developments include:
- Brazil: 21,000 b/d of clean products in November
- Turkey: 21,000 b/d in November
- Sudan: 1.3 million barrels shipped since October
The exports to Brazil and Turkey reflect disruptions in Russian diesel supply following Ukrainian drone strikes and rising sanctions-related compliance risks.
Sudan, however, stands out. With its Khartoum refinery destroyed in 2023 and the country reliant on imports during a civil war, Sudan has become an ideal buyer of discounted products refined from Russian crude — with little incentive to observe Western sanctions.
Ship-to-Ship Hubs Add Flexibility (and Anonymity)
Roughly one-third of Nayara’s November product flows were sent to STS hubs like Fujairah (UAE) and Sohar (Oman). These hubs are often used to obscure final cargo destinations, a common practice in trades affected by sanctions and geopolitical sensitivities.
The Larger Shift: Sanctions Are Redrawing Global Oil Flows
Even as sanctions tighten, Nayara continues importing Russian grades through:
- Opportunistic trading
- Flexible logistics
- New intermediaries
- Access to sanctions-agnostic markets across Asia, the Middle East, and Africa
Analysts believe Nayara may increasingly rely on smaller, opaque trading houses to secure Russian crude if direct purchases from Rosneft become challenging. Whether this workaround can scale remains unclear.
A New Global Energy Map Is Taking Shape
For now, Nayara Energy is demonstrating a strategic pathway for companies facing Western restrictions:
- Use discounted Russian crude
- Build new trade routes
- Expand into developing markets
- Maintain high refinery utilisation even when traditional markets close
Ironically, the sanctions may be accelerating a major structural shift. As Western buyers pull back, developing economies — from East Africa to Latin America — are securing cheaper refined products and increasing their imports. Meanwhile, Western markets face the opposite outcome:
- Higher prices
- Fewer suppliers
- And a tightening supply of sanction-free energy