438
Views

Report: India's Top Bank Pulls Back From Russian-Supplied Refinery

Vadinar
The pier for the Vadinar refinery (Nayara Energy / CC BY SA 4.0)

Published Aug 17, 2025 10:41 PM by The Maritime Executive

 

After the EU imposed sanctions on the Russian-owned, India-based refiner Nayara Energy, the State Bank of India has decided to stop handling international transactions on Nayara's behalf. The decision also follows President Donald Trump's announcement of an extra tariff penalty on India for its continued importation of Russian oil. 

Nayara operates the Vadinar refinery, the second-largest in India, capable of processing about 400,000 barrels per day. Russian state energy giant Rosneft is the largest shareholder with 49 percent of Nayara; another 49 percent stake is owned by joint venture Kesani Enterprises, itself half-owned by Russian investment fund United Capital Partners, based in Moscow.

The Vadinar refinery receives about 70-90 percent of its crude oil supply from Russia, and exports a large share of its refined products to foreign countries - including, until recently, nations in Europe. The company also has its own retail distribution network throughout India, and has the option of redirecting its sales efforts towards domestic markets. 

Now that the EU has sanctioned Nayara in connection with the ongoing Russian invasion of Ukraine, the refiner has come under pressure and its production rates have reportedly fallen. In a statement to the Times of India last week, Nayara insisted that it is "operating at a healthy run rate" despite "unjust sanctions." It has also had difficulty securing tanker tonnage for crude oil deliveries and clean product exports; multiple ships have changed course before or after a call at the refiner's dock, causing logistics problems for export sales. 

"We are actively engaging with governmental authorities and all our partners to facilitate seamless transactions and continue to maintain operational stability," the firm said in its statement last week. 

One additional area in which it may need support is in the execution of international financial transactions. The State Bank of India (SBI) has reportedly stopped handling Nayara's overseas financial transactions because of the risk of EU sanctions - and the risk of attracting more American tariffs on India as a whole, an insider told Economic Times.