India’s diesel exports hit 13-month high amid Iran war: How refiners capitalize on supply disruptions | Today’s news
India’s diesel exports reportedly rose to a 13-month high in October as domestic refiners benefited from tightening global fuel supplies and higher international prices amid disruptions from conflict in West Asia and the Russia-Ukraine war.
Preliminary vessel tracking data from commodity analytics firm Kpler, cited by The Indian Express, showed that India exported an average of 0.71 million barrels per day (bpd) of diesel between October 1 and 29. This represented a 19.6% increase over September and an 8.1% increase over the corresponding period last year.
The jump in supplies comes as disruptions in energy supplies from West Asia and a sharp cut in Russian fuel exports have tightened the global diesel market.
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As international refining margins remain attractive, Indian refiners have stepped up foreign sales and the country has become the world’s second-largest diesel exporter, according to The Indian Express.
Why are India’s diesel exports rising?
The rise in India’s diesel exports is due to a combination of supply disruptions in major energy-producing regions and stronger returns from international markets.
The eight-month-old conflict in West Asia has disrupted global flows of oil, petroleum products and natural gas. The situation has been complicated by the Russian-Ukrainian war, where Ukrainian drone strikes have targeted Russian energy infrastructure and damaged refineries, affecting Moscow’s ability to maintain diesel exports.
Russia, previously the world’s second-largest diesel exporter, has cut supplies, leaving a gap in international markets. Indian refiners have stepped in to capture a larger share of this demand.
The importance of diesel to the global economy further amplified the impact of these supply disruptions.
Reliance Industries accounts for nearly 78% of India’s diesel exports
Private refiner Reliance Industries Ltd (RIL) accounted for the lion’s share of India’s diesel exports in October, underscoring the dominance of private refiners in the country’s overseas fuel trade.
Kpler data cited in the report showed that Reliance exported around 0.55 million barrels per day between October 1 and 29, accounting for nearly 78% of India’s total diesel shipments during the period.
The company’s diesel exports rose 12% year-on-year compared to September and rose 32.5% year-on-year.
Reliance operates the Jamnagar Refinery Complex in Gujarat, the world’s largest single-site refining hub.
This has made the company a major supplier to overseas oil markets, especially as shortages in other export regions create opportunities for alternative suppliers.
Public refineries are also increasing diesel exports
The increase in overseas shipments was not limited to private sector entities. Public sector refiners also expanded diesel exports in October, taking advantage of stronger international margins.
Mangalore Refinery and Petrochemicals Ltd (MRPL) increased its diesel exports to around 38,000 bpd in October compared with around 1,000 bpd in September, Kpler data showed.
Indian Oil Corporation Ltd (IOC) reported a sharp month-on-month increase of 464% in exports to around 53,000 bpd. Meanwhile, Hindustan Petroleum Corporation Ltd (HPCL) increased its supply by 16.3% to around 26,000 bpd, according to a report.
However, Nayara Energy bucked the trend. Diesel exports fell 42.4% month-on-month to around 40,000 barrels per day, the report said.
The increase in several refineries suggests that stronger international diesel margins have encouraged both public and private sector companies to tap into foreign demand.
However, the scale of Reliance’s supply underscores the significant role private refiners play in India’s fuel exports.
How are the Iran war and the Russia-Ukraine conflict affecting global diesel supplies?
The two conflicts have increased pressure on an already sensitive global energy market, disrupting supply chains and increasing uncertainty about the availability of refined petroleum products.
West Asia remains a critical region for global energy supplies. The ongoing conflict has affected energy flows and raised concerns about the security of shipping lanes and infrastructure, contributing to instability in international fuel markets.
At the same time, Ukrainian drone attacks on Russian energy infrastructure have disrupted refinery operations, limiting Russia’s ability to supply refined products, including diesel, to international buyers.
Together, these disruptions have created space for countries with significant refining capacity and established export networks.
With its large refining base and access to international markets, India has been able to increase supply and benefit from a tighter global supply-demand balance.
Will India’s diesel exports remain strong?
India’s diesel export outlook will largely depend on how global supply disruptions play out and whether international refining margins remain attractive.
Experts and analysts cited in the report expect supplies to remain elevated in the coming months if shortages persist in international markets.
However, India’s rising domestic fuel requirements could limit the extent to which refiners can increase foreign sales. Diesel remains a critical fuel for India’s transportation, agriculture, construction and industry sectors.
For Indian refiners, the current market presents an opportunity to benefit from supply disruptions elsewhere.
