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Gujarat refinery hit by EU’s new Russia sanctions; India says double standards
India reiterated that New Delhi “does not subscribe to any unilateral sanction measures” and calling for an end to double standards in energy trade
NEW DELHI: The European Union (EU) on Friday unveiled sanctions on the Vadinar refinery in Gujarat, jointly owned by Russian energy firm Rosneft and an investment consortium, as part of a new package of measures aimed at curbing the revenues of Russia’s oil and energy sector that included an import ban on refined petroleum products made from Russian crude oil and coming from any third country.
The 18th package of sanctions against Russia over its war against Ukraine, announced almost two months after the previous package, also included lowering the oil price cap from $60 to about $48 a barrel. Russia has emerged as India’s top energy supplier since the West slapped sanctions on its oil after the invasion of Ukraine, and currently accounts for nearly 35% of overall supplies, followed by Iraq and Saudi Arabia.
India responded to the EU’s action by reiterating that New Delhi “does not subscribe to any unilateral sanction measures” and calling for an end to double standards in energy trade – a reference to European states buying refined products made from Russian oil from third countries.
“We are a responsible actor and remain fully committed to our legal obligations,” external affairs ministry spokesperson Randhir Jaiswal said. Noting that the Indian government considers energy security as a responsibility of paramount importance, he said, “We would stress that there should be no double standards, especially when it comes to energy trade.”
The new EU sanctions also include measures aimed at 105 more ships that are part of a shadow fleet used to transport Russian crude.
The EU’s foreign and security policy chief Kaja Kallas said on social media that the 27-member bloc had approved “one of its strongest sanctions packages against Russia to date”.
This is the first time since the start of the invasion of Ukraine that EU sanctions have targeted an energy firm in India. The package came days after US President Donald Trump warned that countries buying Russian commodities could face sanctions if Russia fails to reach a peace agreement with Ukraine in 50 days, and NATO chief Mark Rutte spoke of the possibility of sanctions against India, Brazil and China for trading with Russia.
The EU will now set a moving price cap on Russian crude at 15% below its average market price, building on the largely ineffective $60 cap set by the G7 in December 2022. There was, however, no clarity on who would enforce the price cap.
“The EU is lowering the price cap for crude oil from USD 60 to USD 47.6 per barrel, to align it with current global oil prices and is introducing an automatic and dynamic mechanism to modify the oil price cap and ensure that this price cap is effective,” the EU said in a statement on the new sanctions package.
“Full-fledged sanctions (asset freezes, travel bans, bans on providing resources) target Russian and international companies managing shadow fleet vessels, traders of Russian crude oil and a major customer of the shadow fleet – a refinery in India with Rosneft as its main shareholder,” the statement said.
The EU was referring to the Vadinar refinery in Gujarat, owned by Nayara Energy, in which Russia’s state-owned energy exploration and production major Rosneft has a 49.13% stake. The facility is India’s second-largest single-site refinery with an annual capacity of 20 million metric tonnes (MMT) or 405,000 barrels per day (bpd). Nayara Energy, formerly Essar Oil, also owns nearly 7,000 fuel outlets across India.
The bloc will ban the import of “refined petroleum products made from Russian crude oil and coming from any third country – with the exception of Canada, Norway, Switzerland, the United Kingdom and the United States – thereby preventing Russia’s crude oil from reaching the EU market through the back door”, the statement said.
It was not immediately clear how this measure would impact several Indian refiners that ship their products made from Russian crude to EU member states.
The EU will also impose further sanctions “across the shadow fleet value chain” used by Russia to move energy across the world. “An additional 105 vessels will be subject to a port access ban and a ban on the provision of a broad range of services related to maritime transport, bringing the total number of listed vessels to 444,” the statement said.
“This measure targets non-EU tankers that are part of Vladimir Putin’s shadow fleet circumventing the oil price cap mechanism, which support the energy sector of Russia or which transport military equipment for Russia or stolen Ukrainian grain,” it said.
Kallas said the EU will limit access to funding for Russian banks, ban the use of Nord Stream pipelines, and put “more pressure on Russia’s military industry, Chinese banks that enable sanctions evasion, and [block] tech exports used in drones”.
She added, “We will keep raising the costs, so stopping the aggression becomes the only path forward for Moscow.”
India has traditionally not accepted unilateral sanctions and has called for dialogue and diplomacy to end the Russia-Ukraine conflict. During meetings with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky last year, Prime Minister Narendra Modi said that a solution cannot be found on the battlefield and negotiations cannot succeed under the shadow of the gun.
Relations between India and the EU have been significantly strengthened in various fields, including trade and investment, defence, and security, in recent years. However, the conflict in Ukraine remains a topic on which the two sides have not been able to find much convergence. The two sides are currently engaged in negotiations to finalise a free trade agreement by the end of the year.
Ajay Srivastava, founder of Global Trade Research Initiative, said the EU’s new sanctions may impact India’s petroleum trade with Europe and expose a major Indian refinery to increased scrutiny.
“A key measure in the sanctions is a ban on the import of refined petroleum products made from Russian crude oil and re-exported by third countries, excluding only a few partners like the US, UK, Canada and Switzerland. This move will hit countries like India, the UAE and Turkey, which have been importing discounted Russian oil, refining it, and selling products such as diesel and jet fuel to Europe,” Srivastava said. “But worse, it will make EU customers pay higher prices as supplier countries are limited.”
India’s exports of petroleum products to the EU stood at $19.2 billion in FY 2024 but dropped to $15 billion in FY2025. With the EU now closing this route, Indian refiners may need to find alternative buyers.
“Similar action from the US cannot be ruled out. India must watch out for the fast evolving geopolitical game,” he said.
Referring to the sanctions against Vadinar Refinery in Gujarat, he said the facility will face a ban on accessing EU services. “While this marks rising scrutiny, the overall impact on India may remain limited, as EU has already blocked petroleum imports from any third country using Russian crude. Still, the sanctions raise concerns over future Western engagement with Indian firms linked to Russia,” Srivastava said.
