Microsoft cuts Indian firm’s cloud over EU sanctions link

Microsoft temporarily cut off cloud services to Nayara Energy, an Indian oil refiner, before restoring access following a legal dispute.

Nayara Energy is an India-based company operating an oil refinery in Vadinar, with Russian state oil company Rosneft holding a 49% stake.

The incident followed new European Union sanctions targeting entities seen as providing significant revenue to Russia, with Nayara Energy specifically mentioned in the EU’s documentation.

After Microsoft reportedly blocked Nayara’s access to services like Teams and Outlook, Nayara sought a court order in India demanding restoration of service under its contract with Microsoft.

Microsoft reinstated access two days after the court filing.

Following the disruption, Nayara Energy signed up for email services from Indian tech company Rediff.

Local reports highlighted concerns about reliance on foreign technology providers subject to overseas laws, a challenge also debated within the EU regarding digital sovereignty.

🔗 Source: The Register

🧠 Food for thought

1️⃣ Complex ownership structures complicate sanctions enforcement in global economy

The Nayara Energy case demonstrates how intricate corporate structures can create enforcement challenges for international sanctions.

Nayara was formed through a $13 billion acquisition of India’s Essar Oil in August 2017, with Rosneft holding exactly 49.13% ownership through its Singapore subsidiary1.

This carefully structured ownership keeps Rosneft just below the 50% threshold that would typically trigger automatic sanctions under most Western frameworks.

Despite the minority stake, the company operates India’s second-largest single-location refinery with 20 million metric tons annual capacity and over 5,000 retail outlets across India1.

The ownership arrangement has enabled what sanctions experts describe as circumvention, where Russian crude oil gets refined in India and sold back to European markets as an “Indian product”1 2.