Russian Crude Reliance Elevates Operational Risks for Sanction-Hit Nayara Energy

Nayara Energy Faces Operational Challenges Ahead of Scheduled Shutdown

Nayara Energy, a Russian Roseneft-backed refinery, is expected to face operational disruptions and margin impairments due to a scheduled shutdown in April-May. The shutdown will coincide with a decline in crude imports, with Sumit Ritolia, lead research analyst at Kpler, stating that a meaningful reduction in Russian crude intake would significantly impair operations unless sanctions relief or alternative commercial channels emerge.

The refinery's Vadinar unit is expected to run at reduced capacity, with estimates suggesting it may operate at around 60-80% capacity due to sourcing, logistics, and insurance constraints. The refinery has been ramping up crude processing to nearly 90-100% of capacity since EU sanctions were imposed in October, but this may not be sustainable in the long term.

Nayara Energy has been impacted by EU sanctions, which have limited its exports to EU member countries. The refinery has also been affected by the US sanctions imposed on major Russian oil producers Rosneft and Lukoil. As a result, the refinery is heavily reliant on Russian crude, with imports of 391,000 barrels per day (bpd) in February, down from 433,000 bpd in January.

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Key Figures:

• 20 million tonnes: Refinery capacity
• 60-80%: Estimated operating capacity during shutdown
• 391,000 bpd: Russian oil imports in February
• 433,000 bpd: Russian oil imports in January
• 302,000 bpd: Russian oil imports in February 2025
• 1.2 million bpd: Estimated Russian crude imports to India in January-February
• 0.8-1.0 million bpd: Estimated Russian crude imports to India in the coming months