India’s largest public sector bank, State Bank of India (SBI), has suspended all foreign currency and international trade transactions with Nayara Energy, a key Indian oil refiner partly owned by Russian energy giant Rosneft, The Economic Times reported on August 12. The decision aligns with growing global compliance pressures following the latest wave of Western sanctions on Russia.
This move comes in the wake of the United States’ recent tariff hikes in late July and the European Union’s 18th sanctions package. The EU sanctions include a $47.6 per barrel price cap on Russian crude oil and tighter import restrictions on refined petroleum products—directly impacting firms engaged in the Russia-India oil trade.
“This call has been taken by the bank very recently after the US sanctions to ensure compliance with international rules,” a source close to the matter revealed. “There has been no government direction, but every bank has to take a call on how to deal with these issues and SBI has done so.”
According to The Economic Times, Nayara Energy, formerly known as Essar Oil, was acquired in 2017 by a Rosneft-led consortium. The company now operates a 20 million tonnes per annum refinery in Vadinar, Gujarat—accounting for roughly 8% of India’s total refining capacity, making it one of the top oil refiners in Asia. Nayara also controls over 6,500 fuel retail outlets across India.
Like Reliance Industries, Nayara Energy heavily depends on crude oil imports for its refining operations and exports refined products to India, the Middle East, and Europe. However, the intensifying Western sanctions on Russia have raised serious operational and compliance concerns for Indian companies with Russian ties.
“These European sanctions imposed on July 18 were the last straw. All banks with international branches and operations have to adhere to the government laws to ensure that they do not attract regulatory scrutiny,” the source added.
Earlier, it was reported that Nayara Energy, an Indian refiner partly owned by Russian oil giant Rosneft PJSC, is on track to receive its lowest-ever crude oil supply this month as a result of European Union sanctions.
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