Surviving the Flashpoint

In the wake of proliferating sanctions-driven economic shocks, Nayara Energy's dramatic journey highlights India's urgent need for energy autonomy, diplomatic agility, and stronger safeguards

- SANJAY AGARWAL

Essar Oil Ltd was rebranded as Nayara Energy in mid-2018, following its acquisition the previous year, by a consortium led by Russia's Rosneft along with Trafigura and UCP Investment Group. The new name, "Nayara," was coined from the Hindi words "Naya" (new) and "Era," symbolising the start of a new era under international ownership.

Past: India's Oil Play and Nayara's Russian Links. India's rapid growth has driven a thirst for affordable energy, making oil imports and refining a cornerstone of its economy. Nayara Energy, owning one of India's largest refineries (Vadinar, Gujarat), became crucial by processing discounted Russian crude, especially after Western sanctions on Russia, 2022 onwards. This approach helped India bolster its energy security while keeping fuel prices manageable, despite mounting Western scrutiny over its growing ties to Russia.

Present: EU Sanctions Hit Nayara and Reshape Flows In July 2025, the European Union (EU) intensified sanctions on Russia by targeting Nayara directly because of its 49.13 percent Rosneft (Russian) ownership. The fallout was immediate:

Operational disruption: Nayara cut refinery runs, reportedly to 70-80 percent of capacity, down from over 100 percent just months before, as traders and shipowners distanced themselves in fear of secondary sanctions and legal complications.

Export shock: Shipments bound for Europe were cancelled, with tankers diverting mid-route, and cargo tenders (naphtha and diesel) went unawarded due to stricter terms and banking constraints.