**Indian Refiners Face New Challenges After EU Sanctions**
In a significant development, the European Union has imposed new sanctions on Russia, which will affect Indian private refiners that have been relying on cheap Russian crude to boost their margins. The sanctions, which were approved last Friday, ban imports of refined petroleum products made from Russian crude coming from third countries.
**Russian Oil and Refined Products Export**
India’s top oil supplier is Russia, and several Indian private refineries, including Reliance Industries and Nayara Energy, have benefited in recent years from the pressure on Russian crude prices. These refiners have then exported refined products to buyers in Europe. Reliance Industries, for instance, has been shipping an average of 2.83 million barrels of diesel and 1.5 million barrels of jet fuel per month to Europe in the first seven months of this year.
**Impact on Indian Refiners**
The new sanctions will force these private refiners to find workarounds and rely more on traders to find new markets for their products. Traders are likely to play a bigger role in placing refined products made from Russian crude, according to industry sources. For diesel, traders may swap Indian supplies with Middle East cargoes for export to Europe or ship Indian cargoes to floating storage facilities in the Middle East or West Africa to be re-exported.
**Nayara Energy and Reliance Industries**
Nayara Energy, a refinery backed by Russian oil major Rosneft, has been directly sanctioned by the European Union. The company condemned the EU’s “unjust and unilateral” decision to impose sanctions on it. Reliance Industries, India’s largest buyer of Russian oil and refined products exporter, did not immediately respond to requests for comment.
**Impact on Consumers and Producers**
The changes will benefit traders by generating more trade flows, but will be costly for producers and consumers, said an Asian trader. Europe, heading into winter, may have to pay higher prices for refined fuel, he added.
**Indian State Refiners Less Affected**
Indian state refiners, which also buy Russian crude, are likely to be less affected by the sanctions as they sell most of their fuel locally and export through tenders, mostly to buyers in Asia, including Singapore. Mangalore Refinery and Petrochemicals Ltd said its diesel exports were unlikely to be affected by the latest sanctions.
Read More @ www.reuters.com
