India's largest bank backs off Rosneft amid sanctions pressure
Photo: Nayara Energy oil refinery (Getty Images)
India's largest state-owned bank has stopped servicing Nayara Energy, an oil refining company controlled by Rosneft. The decision is related to the risks of falling under US and EU sanctions, according to The Economic Times.
The State Bank of India (SBI) has suspended payment processing for Nayara Energy, which is effectively controlled by Rosneft.
"The bank made this decision very recently after the introduction of US tariffs to ensure compliance with international rules. There were no government directives, but each bank has to decide for itself how to act in such situations, and SBI has made its choice," the agency's source explained.
The new EU restrictions, together with US tariffs, have significantly complicated the processing of the company's transactions. Experts believe that after SBI's decision, other Indian banks are unlikely to agree to cooperate with Nayara.
Attempt to find workarounds
Earlier, Bloomberg reported that Nayara had approached the Indian authorities with a request to connect to a bank that had previously used a special payment scheme for Iranian oil.
Rosneft's stake and new personnel decisions
Nayara Energy was established in 2017 when a consortium led by Rosneft acquired Essar Oil and a refinery in Vadinar with a capacity of 20 million tons per year. The company accounts for about 8% of oil refining in India and operates one of the largest networks of gas stations.
Rosneft directly owns 49.13% of Nayara Energy, which in recent years has been purchasing mainly Russian oil. After being included in the EU sanctions lists, Russian Sergei Denisov was appointed CEO of the company.
EU sanctions have already hit Nayara's production and logistics
On July 18, the European Union approved the 18th package of sanctions against Russia, aimed at weakening the aggressor's oil industry and financial sector. Nayara Energy was also subject to restrictions, forcing the company to cut production at its plant in India with a capacity of 400,000 barrels per day due to fuel storage problems.
In addition, the tanker Sanmar Songbird, which was supposed to load at the port of Vadinar (where the Nayara refinery is located), was redirected to the MRPL facility due to difficulties with cargo insurance.
Nayara itself has already sharply criticized the sanctions, calling them unfair and unilateral.
