EU sanctions hit Russia-backed Nayara hard! Indian refinery switches to local firm after Microsoft suspends services; here's what's happening
EU sanctions on Russia: Hit by European Union sanctions, Russia-backed Nayara Energy refinery in India, has switched to local company Rediff.com for IT services. According to a Reuters report, Microsoft had discontinued its support to Nayara, after fresh sanctions on Russia oil.
The company, which purchases significant quantities of Russian oil and is 49% controlled by Russian petroleum giant
Rosneft
, has faced operational challenges since the EU imposed sanctions this month in response to Russia's military actions in Ukraine, leading to reduced refinery operations.
Nayara's Legal Action Against Microsoft
Nayara, which expressed opposition to the EU sanctions, has reportedly initiated legal proceedings against Microsoft in the Delhi High Court on Monday regarding the termination of services.
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According to Reuters sources, Microsoft discontinued services for Nayara from Tuesday last week, affecting employees' access to Outlook email and Teams messaging platforms.
Whilst Rediff.com's service enables Nayara staff to communicate internally, it cannot access historical data and emails stored within Microsoft's cloud infrastructure, the sources indicated. Rediff, headquartered in Mumbai, delivers online consumer services alongside enterprise cloud-based email solutions.
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Nayara's facility, which can handle 20 million tonnes annually, stands as one of India's primary importers of Russian crude. The organisation represents 8% of the country's refining capabilities, maintains 6,750 fuel stations comprising 7% of the retail network, and is progressing towards securing 8% of polypropylene production capacity.
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Russia oil trouble hits: Shipowners and oil traders avoiding Russia-backed Nayara Energy in India; impact after EU sanctions
"While the sanctions originate exclusively from the EU, Microsoft—a U.S.-headquartered
corporation—has chosen to withdraw services from Nayara Energy without any legal requirement to do so under U.S. or Indian law," Nayara said on Monday.
"This action has been taken unilaterally, without prior notice, consultation or recourse, and under the guise of compliance. Such moves signal a worrying trend of global corporations extending foreign legal frameworks into jurisdictions where they have no applicability," Nayara said.
Nayara Faces Challenges From EU Sanctions
Nayara has become India's first refinery to face EU sanctions. Nayara has confirmed that its operations completely adhere to Indian laws and regulations. The company stated that it maintains consistent communication with Indian authorities to ensure complete transparency and accountability.
The European Union's newest sanctions against Russian oil are already affecting operations at Nayara as both oil firms and shipping companies are now avoiding business dealings with it, according to a Bloomberg report.
Shipping operators have shown reluctance to work with Nayara, both for product exports and crude oil imports.
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India's Stance on EU Sanctions
India has expressed opposition to these latest sanctions, which were declared on July 19. External affairs ministry spokesperson Randhir Jaiswal said, "India does not subscribe to any unilateral sanction measures. We are a responsible actor and remain fully committed to legal obligations. The Government of India considers the provision of energy security a paramount importance to meet the basic needs of its citizens.
We would stress that there should be no double standards, especially when it comes to energy trade."
The sanctions resulted in reducing the price ceiling for Russian oil exports from $60, which was implemented in 2022 after Russia's Ukraine invasion, to $46.7 per barrel at present oil prices.
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