Indian refinery ships diesel to China for the first time since 2021

Faced with sanctions from the European Union (EU) for procuring oil from Russia, India-based Nayara Energy has shipped diesel to China.

This is the first time since 2021, an Indian company has shipped diesel to China. According to a report by Bloomberg, the vessel EM Zenith departed from Nayara’s Vadinar terminal carrying approximately 4,96,000 barrels of ultra-low sulfur diesel on July 18.

The ship sailed just before the EU announced sanctions on the refinery as part of its intensified measures against Russian oil trade.

The vessel, originally scheduled to go to Malaysia, changed course in the Strait of Malacca and remained anchored for approximately 12 days whilst several Nayara cargoes were affected by EU sanctions.

The vessel has since changed its destination to Zhoushan, China, the Bloomberg report said.

Sanctions on the refinery

Nayara is facing payment issues due to sanctions by the EU. It has sought advance payments or a letter of credit before loading the shipment. The company’s Vadinar refinery also had to reduce production due to a disruption in crude oil supply.

The report further said that the diesel shipped to China coincides with improved diplomatic relations between India and China. However, the State Bank of India has stopped processing international trade and forex transactions for Nayara Energy following recent US tariff increases.

Since July, Nayara Energy has encountered difficulties after the European Union implemented its 18th sanctions package, restricting fuel imports from Russia and setting a USD 47.6 per barrel limit on Russian crude prices.