'No order to stop buying Russian oil'

US President Donald Trump's announcement of an additional levy of 25% tariffs on India may further complicate the crude oil import and refined fuel export situation for private refiners, including Reliance Industries and Nayara Energy.

Officials said, though, thus far, there is no directive from the government to stop buying Russian crude, new export markets will have to be determined to place refined fuel products.

"Reliance is only affected by the overall EU sanctions mechanism, and this may impact their margins going forward. But for Nayara, the situation may aggravate further as the exports of refined fuels will suffer, impacting Nayara's refinery throughput further," said an industry official. According to sources, Nayara Energy Ltd has already reduced run rates at its refinery, currently operating it at about 80%. Nayara exports 30% of its refined fuel to other nations.


Brent crude futures were down 35 cents, to $67.29 a barrel on Wednesday, while US West Texas Intermediate (WTI) crude fell 41 cents, to $64.75. Both companies will have to scout for alternative sources for crude supplies.

On August 2, ET reported that Nayara Energy has reached out to Indian state-run refiners and marketers, offering its export volumes of petrol and diesel to these companies. But there is only a limited quantity that the state-run refiners can lift. Nayara Energy runs India's second-largest single-location refinery in Vadinar, Gujarat, with a capacity of 20 million tonnes per annum.

Nayara Energy delivers approximately 8% of India's refining output and is currently expanding capacity in the petrochemical and alternative energy sectors. The company, which has 6,300 retail outlets now, had plans to expand the network by over 50% by 2030.

The EU member states on July 18 introduced sanctions against Russia, in a bid to target the oil and energy sector revenues.