Rosneft, a major Russian oil company, has strongly condemned the European Union's (EU) recent sanctions targeting Nayara Energy's refinery in Vadinar, Gujarat, India. The Russian oil giant, which holds a 49% stake in Nayara Energy, has described the EU's actions as "unjustified and illegal," arguing that they pose a direct threat to India's energy security and could negatively impact the country's economy.
The EU's sanctions, unveiled on Friday, are part of a new package of measures aimed at curbing Russia's oil and energy revenues in response to the ongoing war in Ukraine. These measures include new banking restrictions and curbs on fuels made from Russian crude oil. The EU has also lowered the oil price cap, currently at USD 60 per barrel, forcing Russia to sell its crude at reduced rates to countries like India. The sanctions package included an import ban on refined petroleum products made from Russian crude oil and coming from any third country.
Rosneft argues that the sanctions against Nayara Energy are an example of the "extraterritorial implementation of politically motivated restrictions" that violate international law and infringe on the economic interests of a sovereign state. The company insists that Nayara Energy is an Indian legal entity whose economic activity is aimed at developing its assets within India, and that it pays its taxes entirely in India. Rosneft also stated that Nayara Energy shareholders have never received dividend payments, and the accumulated profits have been exclusively used for the development of the refinery, petrochemicals, and the company's retail network in India.
Rosneft emphasized that it is not a controlling shareholder of Nayara Energy, as its share in the company's authorized capital is less than 50%. The company also stated that Nayara Energy is managed by an independent board of directors. Rosneft has expressed confidence that Nayara Energy will take measures to protect the legitimate interests of its shareholders and consumers, with the support of the Russian and Indian governments.
The EU's sanctions against Nayara Energy have raised concerns about India's energy security. The Nayara Energy refinery is a strategically important asset for the Indian energy industry, providing a stable supply of petroleum products to the country's domestic market. Rosneft has warned that the sanctions could destabilize global energy markets and demonstrate a disregard for the sovereignty of third countries.
India has reiterated that it "does not subscribe to any unilateral sanction measures" and has called for an end to double standards in energy trade. India, the second-largest purchaser of Russian oil, may benefit from the lowered oil price cap, as Russian crude accounts for nearly 40% of India's total oil imports. However, there are concerns that the EU's sanctions could impact India's petroleum trade with Europe and expose a major Indian refinery to increased scrutiny. India's exports of petroleum products to the EU stood at $19.2 billion in FY 2024 but dropped to $15 billion in FY2025. With the EU now closing this route, Indian refiners may need to find alternative buyers.
