Russian Oil Row: Nayara Refinery’s Future at Risk Amid US Sanctions, India May Negotiate with Washington

New Delhi: Clouds of uncertainty have emerged over the future of Nayara Energy’s refinery in Gujarat after US President Donald Trump warned against purchasing crude oil from Russia, threatening to reimpose a 25% additional tariff. The warning has raised questions over the operations of the Vadinar-based refinery, which has majority ownership by Russia’s state-owned energy giant Rosneft.

A Strategic Refinery at Stake

The Nayara Energy refinery, located in Vadinar, Gujarat, is India’s second-largest single-site refinery with an annual processing capacity of 20 million tons of heavy crude. Prior to US sanctions, it relied heavily on Russian crude oil for operations. Analysts suggest that while Nayara remains an attractive acquisition target, Washington’s hardline stance on Russian oil may deter potential buyers. The situation is expected to persist until a major diplomatic breakthrough eases the geopolitical tensions surrounding Russia’s actions in Ukraine.

India’s Options

Energy experts say India may seek to negotiate with the US for limited imports of Russian crude to meet immediate operational needs. Indian refiners have already started reducing purchases, but due to cargos booked for the next eight to ten weeks, an abrupt halt is not feasible. Prashant Vashisht, Senior Vice President at rating agency ICRA, noted, “India is likely to bargain with the US to allow some Russian oil imports, especially for the Nayara refinery.”

Will India Continue Buying Russian Oil?

Energy analyst Narendra Taneja echoed this view, adding that India may continue purchasing Russian crude, albeit in smaller quantities. This approach allows New Delhi to maintain strategic autonomy while safeguarding its domestic political image. He further emphasized that India’s deepening trade ties with the US—planning $500 billion in merchandise trade over five years—could influence energy decisions. In return, India expects capital flows, technology transfer, and better access to American markets.

Numbers Behind the Russian Oil Imports

Official data shows that roughly one-third of India’s crude imports come from Russia. In December 2025, imports fell to $2.7 billion—a three-year low—down 27% from $3.7 billion in November. Despite the decline, Russia remained India’s largest crude supplier in 2025-26, accounting for 31.5% of total imports worth $105.1 billion between April and December.

With ongoing discussions with Washington, the fate of Nayara Refinery hinges on how India balances energy security, geopolitical pressure, and its evolving trade relationship with the United States.