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According to Reuters, citing trade data and vessel tracking, India’s diesel exports to Europe reached an all-time high in September. This surge comes amid heightened demand and constrained European supply due to refinery maintenance activities.
Estimates from Kpler and LSEG indicate that India exported approximately 9.7 to 10.4 million barrels of diesel to Europe in September, marking the highest level since records began in 2017.
The primary drivers behind this trend include the widening East-West diesel price spread, reduced shipping costs since late August, and attractive refining margins that incentivized European buyers. Simultaneously, seasonal maintenance at several European refineries has limited regional output, prompting importers to seek alternatives from abroad.
However, analysts suggest this trend may not persist into October. Domestic demand in India is expected to rise significantly during the Diwali festival season, when diesel—the country’s most widely used fuel—is in high demand.
Despite this, Ivan Mathews, Asia-Pacific Head of Analysis at Vortexa, notes that robust refining margins could continue to motivate Indian refineries to maintain elevated export levels.
Long-term prospects for Indian diesel exports to Europe remain uncertain. The EU has adopted its 18th sanctions package, aimed at preventing Russian crude oil from reaching European markets via third countries. These measures, set to apply to refined oil products from Russia (excluding imports from Canada, Norway, Switzerland, the UK, and the US), could impact India’s fuel exports, as Russia accounts for roughly one-third of India’s crude oil imports.
India’s energy infrastructure heavily relies on affordable supply sources, with discounted Russian oil playing a critical role. An abrupt reduction could drive up domestic fuel prices and import costs. Recently, Indian officials proposed substituting Russian oil with supplies from Iran or Venezuela, pending US approval. Such a move would alleviate pressure from Washington without overhauling India’s energy framework.
In recent negotiations, US trade representatives emphasized to India that reducing Russian crude oil purchases is essential for easing US sanctions and advancing trade agreements.
Source: Reuters
