In the world of cloud computing, trust is everything. Businesses migrate to the cloud because they expect reliability, scalability, and uninterrupted operations, regardless of their location or external pressures that may arise. But what happens when these foundational expectations are jeopardized? Recent events involving Microsoft and Nayara Energy suggest that trust in public cloud providers is being eroded, especially among businesses operating outside the United States, and driving a growing movement toward sovereign and private cloud solutions.
Microsoft collides with geopolitics
The recent dispute began on July 18, 2025, when the European Union (EU) announced a fresh round of sanctions targeting Russia to exert economic pressure related to the war in Ukraine. In the fine print of the EU sanctions, Nayara Energy (a major oil refinery in India) was flagged due to its 49% ownership by Russia’s state oil company, Rosneft. The EU accused Nayara of contributing revenue to the Russian government and, as a result, made it subject to sanctions.
Shortly after the announcement, U.S.-based Microsoft took action by suspending Nayara Energy’s access to its Teams and Outlook services. Essentially, Microsoft acted as an enforcer of the EU sanctions, cutting off a customer from cloud services it had paid for. From Microsoft’s perspective, this action might have seemed unavoidable—if it didn’t comply with the EU’s sanctions, the company could face legal or financial repercussions. But from Nayara Energy’s view, this was nothing short of a unilateral disruption of its business activities by a foreign entity.
