**Indian Shipping Firms Seek to End Contracts with Russian-Linked Refiner**
Two Indian shipping companies, Seven Islands Shipping and Great Eastern Shipping (GESCO), have asked Nayara Energy, a major oil refining company in India, to terminate their contracts. The move comes as the EU has imposed new sanctions on Russia’s energy sector, targeting Rosneft, which is partly owned by Nayara.
According to Reuters, the two shipping firms cited exposure to sanctions risks and requested that Nayara release three tankers, the Bourbon, Courage, and Jag Pooja. This development highlights the growing uncertainty and risk faced by companies with ties to Russia in light of Western sanctions.
**Nayara Energy Under Pressure**
Nayara Energy operates India’s third-largest refinery and is majority-owned by Russian entities, including Rosneft. The company has come under intense pressure since the EU adopted its 18th sanctions package on July 18. This package specifically targeted Rosneft-linked Indian refineries for the first time.
As a result of the sanctions, Nayara was forced to cut production at its 400,000 barrels-per-day refinery due to fuel storage restrictions. The company also faced difficulties in loading and unloading cargo from tankers, with one tanker being diverted from its Vadinar port. In response to these challenges, Nayara’s CEO stepped down shortly after the sanctions were announced.
**Impact of EU Sanctions**
The latest EU sanctions are part of a broader effort to squeeze Russia’s oil revenues and restrict its ability to fund the war in Ukraine. These measures have significant implications for companies with ties to Russia, as seen in the case of Nayara Energy. The threat of US President Donald Trump’s 100% tariffs on countries importing Russian crude adds further pressure.
**India’s Dilemma**
Despite Western calls to cut economic ties with Russia, India has maintained neutrality on the war and resisted these demands. This stance has allowed India to benefit from discounted oil imports from Russia since Moscow launched its full-scale invasion of Ukraine in 2022. However, as the sanctions landscape evolves, Indian companies like Nayara Energy are facing growing challenges.
**Commentary**
The decisions made by Seven Islands Shipping and GESCO reflect the escalating risks faced by companies with ties to Russia. As Western sanctions continue to tighten, it is likely that more Indian firms will re-evaluate their partnerships and contracts with Russian-linked entities. This development could lead to a shift in India’s economic stance on Russia and its energy sector.
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