Many companies are not dealing with Indian oil refineries due to Russian affiliation

 

Due to the ownership of the Russian oil company Rosneft, many oil trading companies and banks of the world have cut ties with the Indian oil refining company Naira Energy.  Two sources familiar with the matter told Reuters that international institutions do not want to do business with the Indian company, fearing that Ukraine may fall under Western sanctions due to the war.

 While there is no ban on Naira Energy so far, there is a ban on Rosneft.  Rosneft owns 49 percent stake in Naira, India's second largest privately owned oil refiner.  Another 49.13 percent stake in Naira Energy is owned by Kesani Enterprises Company Limited.  Kesani is a consortium led by Singapore-based multinational Trafigura Group and Russia's UCP Investment Group.

The two sources asked not to be identified as they are not authorized to speak to the media.  A source said most trading firms, including Vitol and Glencore, and oil producers in Canada, Latin America and Europe are not willing to sell crude oil directly to the naira.

 Naira has now become dependent on state-owned oil producers in the Middle East, Chinese business firms, Russian oil suppliers and local oil producers, two sources said.  Naira refines 400,000 barrels of oil per day at its refinery in Gujarat.

 "This is making things difficult for Naira Energy by the day," said a source.  Other sources said the companies that do not want to do business with Naira Energy include Phillips 66, Occidental Petroleum Corporation, Cepsa, Equinor, Gunvor, Koch, Petrogal, Resposol, Shell, Suncor Energy, Ecopetrol and Total Energies.

Sources said other institutions, including banks, that do not want to deal with naira again include Citigroup, Morgan Stanley, BNP Paribas, JP Morgan, France's NG.  Apart from this there are Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.

 Reuters contacted these institutions, companies and banks for a statement on this matter, but they did not receive any response.

Naira accounts for 8 percent of the oil refined in India.  The company says it has a long-standing relationship with these crude oil suppliers.  They work with various suppliers and have appropriate contracts with these companies for importing crude oil.

 Reuters says many Western countries and companies are not buying Russian oil because of the sanctions.  Naira is among those who are buying oil from Russia at discounted prices in such a situation.  By doing this, the company has made a record profit of 3 thousand 560 crore Indian rupees in the second quarter (April-June) this year.