Saudi Arabia, Iraq stop oil shipments to Nayara after sanctions

Saudi Arabia, Iraq stop oil shipments to Nayara after sanctions

In a significant development, Saudi Arabia and Iraq have ceased crude oil shipments to Nayara Energy Ltd.'s refinery in western India following the European Union's sanctions against the company. The sanctions, imposed in July, target Nayara's 49% stake held by Russia’s Rosneft PJSC, aiming to restrict the Kremlin's energy revenue streams, particularly from oil exports to India and China [1].

Saudi Aramco, the state-owned oil giant, halted crude oil sales to Nayara after the EU measures, citing payment issues due to sanctions as the reason for the stoppage [1]. Similarly, Nayara did not receive any shipments from Iraq's state oil marketeer SOMO in August [1]. The refinery's last deliveries of Arab Light and Basrah Heavy were received on July 18 and July 29, respectively, according to data from analytics firm Kpler [1].

Nayara's refinery in Gujarat state, with a capacity to handle 400,000 barrels a day, imported an average of 242,000 barrels a day last month, its lowest level since November 2022 [1]. All barrels imported were of the Russian grade Urals, indicating a significant reliance on Russian oil supplies. Last year, about 29% of Nayara's imports were from the Middle East [1].

The sanctions have led to payment and shipping challenges for Nayara. The firm has reduced processing rates and is utilizing a pool of dark-fleet tankers for deliveries. Nayara has reached out to the Indian government for assistance in finding banking channels and ships for oil and product flows [1].

The situation is further complicated by US pressure on India to curb discounted oil purchases from Russia. US President Donald Trump has implemented a 50% tariff on Indian goods as part of this campaign [1]. This pressure adds to the challenges faced by Nayara and India in maintaining their oil supply chain.

References:
[1] https://www.bloomberg.com/news/articles/2025-09-01/saudi-arabia-iraq-stop-oil-shipments-to-nayara-after-sanctions