India sends diesel cargo to China for the first time in 4 years, as Nayara Energy navigates sanctions and banking restrictions.
Mumbai, August 14, 2025 — In a significant development in global energy trade, India sends diesel cargo to China for the first time since 2021. The shipment, arranged by Nayara Energy—a major Indian refinery partly owned by Russian stakeholders—comes amid tightening Western sanctions on Russian crude oil and its related products.
According to vessel tracking data from Kpler and Bloomberg, the tanker EM Zenith departed from Nayara’s Vadinar terminal in Gujarat on July 18 carrying approximately 496,000 barrels of ultra-low sulfur diesel. Initially bound for Malaysia, the vessel remained anchored in the Strait of Malacca for nearly two weeks before redirecting to Zhoushan, China.
The shipment occurred shortly before the European Union’s 18th sanctions package came into force. The new regulations included a $47.6 per barrel price cap on Russian crude and an additional 25% U.S. tariff on Indian trade involving Russian oil.
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Industry sources confirm that the State Bank of India (SBI), the country’s largest public sector bank, has ceased processing international and foreign exchange transactions for Nayara Energy. This move, said to be taken independently by the bank, aligns with stricter compliance requirements under U.S. and EU sanctions.
“These recent European sanctions, particularly those enacted on July 18, were the tipping point. All banks with international exposure must now comply strictly to avoid regulatory scrutiny,” a senior executive familiar with the matter said.
Since July, Nayara has faced operational challenges, including disrupted crude imports from Russia and scaled-down refinery production. Analysts believe the shipment to China is part of a broader strategy to diversify export markets and maintain refinery operations despite shrinking trade opportunities in Western markets.
Energy trade between India and China has been limited since April 2021. The latest development may signal a recalibration in bilateral energy ties, even as geopolitical tensions continue.
This shipment underlines the shifting dynamics in global oil trade as energy companies navigate an increasingly fragmented market shaped by sanctions, tariffs, and shifting alliances. India Sends Diesel Cargo to China
