Rosneft Criticizes EU Sanctions on Nayara Energy, Citing Energy Security Risks

In a strong condemnation, Russian oil giant Rosneft has responded to the European Union's recent sanctions targeting Nayara Energy, its Indian affiliate, labeling the actions as "unjustified" and a direct threat to India's energy security. This statement, released on July 20, 2025, comes in the wake of the EU's latest sanctions aimed at curbing Russian revenues amidst the ongoing conflict in Ukraine.

Rosneft's announcement highlights concerns regarding the extraterritorial nature of the sanctions, asserting that they infringe upon international law and the economic interests of sovereign nations. "These sanctions are yet another example of extraterritorial implementation of politically motivated restrictions that blatantly violate international law," Rosneft stated, as reported by the Press Trust of India (PTI).

The sanctions, introduced by the EU, include new banking restrictions and a reduction in the oil price cap for Russian crude, now set at USD 60 per barrel, and are seen as measures to further limit the economic capabilities of Russia. While India was not specifically named in these sanctions, Nayara Energy, which operates a significant refinery in Gujarat, could be adversely affected.

Currently, Russian crude supplies account for nearly 40% of India's total oil imports, positioning India as the second-largest buyer of Russian oil. Despite potential benefits from the lower price cap, Rosneft maintains that it holds a minority stake in Nayara Energy, which is managed by an independent Board of Directors. The company emphasized that its profits are reinvested in developing Nayara's refinery and retail operations, rather than being distributed as dividends.

"The refinery is a strategic asset for India, contributing significantly to the nation's fuel supply and economic stability," Rosneft asserted. The company expressed concerns that the sanctions would not only jeopardize Nayara's operations but would also negatively impact India's overall economic framework.

Furthermore, the Global Trade Research Initiative (GTRI), a think tank, has warned that India's petroleum exports worth approximately $15 billion to the EU could face serious risks due to these sanctions. GTRI noted that the EU's ban on fuels refined from Russian oil in third countries like India might severely undermine India's diesel, petrol, and jet fuel exports.

In the context of rising geopolitical tensions, the implications of these sanctions extend beyond immediate economic concerns, potentially reshaping energy security dynamics in the region. Notably, experts emphasize the need for a balanced approach that considers both energy independence and international relations.

Dr. Alice Thompson, Senior Fellow at the Institute for International Affairs, remarked, "India’s reliance on Russian oil complicates its diplomatic efforts. The government must navigate these challenges carefully to ensure energy security while maintaining strategic partnerships."

As the situation evolves, Rosneft has indicated that it expects Nayara to act in the best interests of its shareholders and consumers, with backing from both the Russian and Indian governments. The outcome of these sanctions and their long-term effects on India’s energy landscape remain to be seen, as the global community watches closely.

In conclusion, Rosneft's condemnation of the EU's sanctions reflects broader concerns regarding international trade, energy security, and the geopolitical landscape shaped by the ongoing conflict in Ukraine. As India continues to rely heavily on Russian crude, the pressure from international sanctions presents a complex challenge that may necessitate a reevaluation of energy import strategies and diplomatic relations in the coming years.