Russia-backed sanctioned Indian refiner boosts crude runs to 90%, sources say

NEW DELHI: Russia-backed Indian refiner Nayara Energy has ramped up crude processing at its Vadinar refinery to 90% to 93% of capacity, two sources familiar with the matter said, after European Union sanctions curtailed operations earlier this year.

Oil processing at Nayara’s 400,000 barrels per day western India plant dropped to 70% to 80% after the EU sanctioned it in July, denting its exports and leading suppliers such as Iraq and Saudi Arabia to halt crude sales to the company, sources have previously said.

Before the sanctions, Nayara’s refinery was running at 104% of capacity.

Nayara is majority-owned by Russian entities including Rosneft which holds a 49.13% stake and was sanctioned last week by the United States.

Nayara and Rosneft did not immediately respond to requests for comments.

Nayara’s crude runs have rebounded recently as it boosted domestic fuel sales, including supplies to state-owned refiner Hindustan Petroleum Corp the sources said.

The private refiner is operating its plant using only Russian oil, ship tracking data shows. The sources said Russian oil was arranged by Rosneft and sold to Nayara through traders.

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Nayara is likely to continue buying Russian oil through non-sanctioned entities, the sources said, declining to elaborate on how Nayara is making payments for its crude oil purchases.

Reuters reported previously that Nayara was settling payment for its Russian oil supplies against product exports.

Most Indian refiners, including Russia’s biggest Indian client, Reliance Industries halted purchases of Russian oil after Washington imposed sanctions last week on Rosneft and Lukoil another Russian energy company.

However, state-owned Indian Oil Corp, India’s biggest refiner, bought five cargoes of Russian oil for December arrival from non-sanctioned entities, Reuters reported on Friday.

Nayara operates more than 6,600 retail fuel outlets.