India’s diesel exports to Asia witnessed a sharp decline of 63% month-on-month in March, primarily attributed to heightened competition from Chinese and South Korean suppliers, which adversely impacted margins.
Energy cargo tracker Vortexa reported that Indian refiners exported 61,000 barrels per day (bpd) of diesel to Asian customers in March, down from 163,000 bpd in February. Concurrently, diesel exports to Europe saw a modest increase of 6.5% to 214,000 bpd during the same period, while no diesel was exported to the US. The dwindling export volumes to Asia underscore the challenges faced by Indian refiners amidst fierce competition from regional players. “Ample supplies of diesel in Asia, particularly from South Korea and China, have significantly eroded export margins,” stated industry experts. Meanwhile, growing import demand in Europe, driven by increasing refinery maintenance activities, has bolstered export volumes to the region. India’s monthly diesel export volumes to Asia have exhibited significant variability, ranging from 11,000 bpd in April 2023 to 189,000 bpd in August of the same year, with an average monthly shipment of 92,000 bpd throughout 2023-24. Conversely, diesel supplies to Europe have remained relatively stable, averaging 222,000 bpd during the same period. However, disruptions such as the Houthi attacks in the Red Sea have led to fluctuations in export volumes, with January witnessing a dramatic decline to 56,000 bpd, followed by a swift recovery in February.
Furthermore, India’s overall refined products exports to Asia registered a 15% month-on-month decrease to 332,000 bpd in March, while exports to Europe declined by 4.5% to 319,000 bpd. The redirection of some refined product shipments from Europe to Asia in January, amidst Red Sea tensions, contributed to the fluctuating export figures. The challenges in diesel exports highlight the need for Indian refiners to adapt to evolving market dynamics and intensifying competition, while also exploring avenues to enhance export efficiency and maintain market competitiveness.