The Great Oil Balancing Act: India’s Strategic Maneuvering Amidst US-Russia Tensions

India’s Nayara Energy, a Russian-backed company currently on the European Union’s sanctions list, is turning to a “shadow fleet” to maintain its crude oil imports and refined fuel exports.

According to LSEG shipping and cargo flow data, this month, Nayara imported at least seven shipments of crude oil from Russia, including the Centurion, Mars 6, Pushpa, Horae, and Devika (formerly known as Apar) vessels, all of which are under EU sanctions. Each vessel carried approximately 700,000 barrels of Russia’s flagship Ural crude oil.

Nayara currently operates the Vadinar refinery in Gujarat, with a capacity of 400,000 barrels per day, accounting for about 8% of India’s total refining capacity of 5.2 million barrels per day. Before the sanctions were imposed, the company sold approximately 70% of its refined fuel through a network of over 6,600 domestic gas stations and exported the rest. However, since July, when the EU placed Nayara on its sanctions list, many international carriers have withdrawn, forcing the company to cut capacity to 70-80%.

Industry sources say that Indian ships on international routes are reluctant to transport oil and refined products for Nayara due to insurance difficulties. In this context, Russian entities are supporting the company in arranging alternative vessels.

According to LSEG data, Nayara has used the Next, Tempest Dream, Leruo, Nova, Varg, Sard, and Uriel vessels (all sanctioned) to transport gasoline and diesel to market. Some ships have been renamed after being banned by the EU.

On the Russian side, Mr. Evgeniy Griva, Deputy Trade Representative in India, affirmed that Nayara is still receiving a stable oil supply from Rosneft and operating without major obstacles. The company is also reportedly seeking support from the Indian government to ensure safe transportation and maintain production.

As the third-largest oil importer and consumer in the world, India only complies with sanctions imposed by the United Nations and does not enforce unilateral measures from the US or EU. This allows domestic refineries, including Nayara, to continue doing business with Russian partners and use vessels on the EU’s sanctions list.