A refinery in India that's part-owned by a Russian energy producer tightened conditions for selling products after the European Union imposed sanctions on the company, highlighting the fallout for the processor, its customers, and the wider market from the tougher restrictions.

Nayara Energy Ltd., part-owned by Rosneft PJSC, said it was seeking advance payment or a documentary letter of credit, before loading a shipment of naphtha next month, according to a revised tender document seen by Bloomberg. An earlier tender asked for no such requirements.

The global oil market is tracking the evolving web of restrictions against Russia-linked energy products and producers as the EU and other groups escalate their response to Moscow's invasion of Ukraine. The latest EU package of moves which also included a lower price cap on cargoes of Russian crude, as well as planned curbs on products made from Russian petroleum was unveiled last week, spurring swings in crude futures.

India has evolved as a critical destination for Russian crude oil, as western nations shunned imports of the commodity after Moscow attacked Kyiv in 2022. Still, the EU has until now remained an important market for petroleum products made from Russian crude, and hadn't targeted Nayara.

In a weekend statement, Rosneft said the newly-imposed EU sanctions against Nayara were "unjustified and illegal." Nayara operates a 400,000-barrel-a-day refinery, and owns nearly 7,000 fuel outlets across India. It is also developing an integrated petrochemicals plant next to its refinery.

Source: The Economic Times

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