Saudi Aramco and Iraq’s SOMO have stopped crude sales to India’s Nayara Energy.
The steps followed EU sanctions on the Russian backed refiner in July.
Gulf crude sales to India halted and Russia fills the gap
With Gulf flows halted Indian refineries are completely relying on Russia for crude in August. Whereas, shipping data showed no receipts from Saudi Arabia or Iraq last month.
Normally Nayara takes about two million barrels of Iraqi crude each month. Similarly, it also takes about one million barrels of Saudi crude.
Investigative journalists said the sanctions created payment problems on Iraqi purchases.
Upon getting the official statement SOMO and Nayara did not comment. In similar fashion, Saudi Aramco also declined comment.
The last Basra cargo from SOMO reached Vadinar on July 29 on the VLCC Kalliopi. The last Saudi delivery was Arab Light on July 18 on the VLCC Georgios.
Furthermore, that ship was co loaded with a similar volume of Basrah heavy.
Refinery runs and market strain
At normal production level Nayara operates a 400,000 barrel per day refinery at Vadinar.
Whereas now the plant has been running at about 70 to 80 percent. The reason is difficulty in selling products under the sanctions.
Moreover, the company controls about 8 percent of India’s total refining capacity. After other shippers backed out it has used so called dark fleet vessels to move fuel.
Despite US sanctions, Russian Embassy official in New Delhi said Nayara is receiving direct supplies from Rosneft.
Leadership changes and outlook
The chief executive of Nayara resigned in July and last week the company named a senior executive from SOCAR as the new CEO.
For India the shifts may tighten fuel logistics and raise costs.
In addition, for regional traders the changes could redirect cargo flows and freight.
International markets will continue to watch if Gulf supplies resume. Furthermore, they will also track Russian flows and the impact on refinery runs in the months ahead.
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