free counter
Business

Sanction-wary oil traders boycott an Indian refiner backed by Russia’s Rosneft

Several global oil traders and banks have cut ties with Nayara Energy, Indias second-largest private refiner backed by Russian oil major Rosneft.

Amid fears of Western sanctions following a Russian invasion of Ukraine, trading firms and oil producers in Canada, Latin America and Europe have stopped selling crude to Nayara directly, Reuters reported yesterday.

Companies like Citigroup, Morgan Stanley, BNP Paribas, amongst others, too, have severed ties. In April, Indias HDFC Bank stopped trade credit to Nayara for overseas oil trade.

While Nayara hasnt faced any sanctions, Rosneft does.

Nayaras affiliation with Rosneft

Rosneft holds about 49% in Nayara, as the rest is owned by Kesani Enterprises, a consortium led by Trafigura Group and Russias UCP Investment Group.

The Indian refiner is currently scrambling for supplies from West Asia along with other countries to meet up its 400,000 barrels each day production.

Since April, Russian oils share in Nayara Energys mix had risen significantly largely because of heavy discounts on Russian Urals and the grade of products. Due to this, Nayaras quarterly profit surged to an archive $446 million in April-June.

With banks pulling the plug now, the Mumbai-based company, which makes up about 8% of Indias refining capacity, has been selling mostly within the united states.

Aside from honouring the long- and shorter-term contracts, our suppliers may also be offering, and we grab crude on an area basis on competitive terms, a statement from Nayara said yesterday (Aug. 24).

Besides, a weak Indian rupee and risky external accounts require local importers to hedge their currency exposures a lot more than necessary, experts believe. This renders Nayaras overseas trade commitments risky.

Read More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker