Why did EU sanction Nayara Energy's Vadinar refinery in Gujarat? What we know so far

Mint

19-07-2025

Nayara Energy's Vadinar oil refinery in Gujarat, India, has been hit by sanctions as the European Union (EU) unveiled new punitive measures targeting the Russian energy sector. The fresh restrictions drew a harsh response from India, which called for ending double standards in energy trade.
Here's all you need to know about EU sanctions on Nayara Energy's oil refinery in Gujarat:
The new EU sanctions include a lower oil price cap, the designation of the "biggest Rosneft refinery in India", and measures aimed at 105 more shadow fleet ships.
"Full-fledged sanctions target Russian and international companies managing shadow fleet vessels, traders of Russian crude oil and a major customer of the shadow fleet – a refinery in India with Rosneft as its main shareholder," the EU was quoted by PTI as saying.
The EU was referring to Nayara Energy's Vadinar refinery in Gujarat.
The 18th package of sanctions by the 27-nation EU included a set of measures largely aimed at curbing Russia's oil and energy sector's revenues.
The measures also included reducing the oil price cap from $60 to about $48 a barrel. They also introduced an import ban on refined petroleum products made from Russian crude oil and coming from any third country—with the exception of Canada, Norway, Switzerland, the United Kingdom, and the United States.
According to Reuters, Russian energy giant Rosneft has a 49.13 percent stake in Nayara Energy's Vadinar refinery in Gujarat.
The ownership of Nayara is currently split between Rosneft and SPV Kesani Enterprises Co. Ltd., an investment consortium. The remaining shares are held by retail investors.
Nayara operates a 400,000-barrels-per-day refinery and owns nearly 7,000 fuel outlets across India. It is also developing an integrated petrochemicals plant next to its refinery.
Hours after the EU announced the new measures, India said there should be "no double standards", especially when it comes to energy trade.
"India does not subscribe to any unilateral sanction measures. We are a responsible actor and remain fully committed to our legal obligations," External Affairs Ministry spokesperson Randhir Jaiswal said.
"The government of India considers the provision of energy security a responsibility of paramount importance to meet the basic needs of its citizens," he said.
Jaiswal also said, "We would stress that there should be no double standards, especially when it comes to energy trade."
Russian energy giant Rosneft's plan to sell its stake in India-based Nayara Energy Ltd. may be imperiled by fresh restrictions from the European Union.
According to Bloomberg, Rosneft held talks with Reliance Industries Ltd., owned by billionaire Mukesh Ambani, for a possible stake sale in Nayara.
However, the sanctions will make it difficult for Reliance to buy a stake in its competitor as it might jeopardise the company's business in Europe, a region that regularly imports Indian fuels including diesel.
Reliance Jamnagar processor, the world's largest refining complex, is within a few kilometers of Nayara's Vadinar unit.
Rosneft has been keen to exit its India venture as the company hasn't been able to repatriate its earnings due to the sanctions, according to local media reports.
India's oil imports from Russia rose marginally in the first half of this year, with private refiners Reliance Industries Ltd and Nayara Energy making about half of the overall purchases from Moscow.
As per data cited by Reuters, India, the world's third-largest oil importer and consumer, received about 1.75 million barrels per day of Russian oil in January-June this year, up 1% from a year ago.
Russia continued to be the top supplier to India, accounting for about 35% of India's overall supplies, followed by Iraq, Saudi Arabia, and United Arab Emirates, the data showed.
In case Russian supplies are hit, Indian Oil Corp will "go back to the same template [of supplies] as was used pre-Ukraine crisis when Russian supplies to India were below 2%," company Chairman A.S. Sahney told reporters at the event.
Oil Minister Hardeep Singh Puri said on Thursday that India is confident of meeting its oil needs from alternative sources if Russian supplies are hit by secondary sanctions.
Earlier this week, US President Donald Trump warned that countries purchasing Russian exports could face sanctions if Moscow fails to reach a peace agreement with Ukraine within 50 days.
"I'm not worried at all. If something happens, we'll deal with it," Puri said at an industry event in New Delhi. "India has diversified the sources of supply and we have gone, I think, from about 27 countries that we used to buy from to about 40 countries now," he said.