India sends rare diesel cargo to China as Nayara faces sanctions

A cargo of Indian diesel is heading to China, in what would be first such shipment since 2021, with oil product exports from Russia-linked Nayara Energy in a state of limbo following the latest round of European Union sanctions.

The EM Zenith sailed from the Nayara’s Vadinar terminal with about 496,000 barrels of ultra-low sulfur diesel on July 18, according to Kpler, a port agent report and ship tracking data compiled by Bloomberg. The departure came just hours before the EU announced restrictions on the Rosneft-backed refinery as a part of a renewed crackdown on Russia’s oil trade.

The vessel was initially bound for Malaysia but made a U-turn in the Strait of Malacca and was anchored for about 12 days as multiple Nayara cargoes were stranded after the EU sanctions. The tanker has now updated its destination to Zhoushan, China.

A Nayara spokesperson didn’t immediately reply to a message seeking comment.

The sanctions have also complicated payments for Nayara in recent weeks, with the company seeking upfront renumeration or letters of credit for fuel shipments prior to loading, and to cut production at its Vadinar refinery with crude shipments choked off.

The diesel shipment to China is the first from India since April 2021, according to Kpler data. It follows a thawing of bilateral tensions between the Asian neighbours.