India’s diesel exports to Europe experienced a remarkable fourfold increase in June compared to the previous month, driven by more favourable margins on the continent. According to data from energy cargo tracker Vortexa, Indian refiners exported 119,400 barrels per day of diesel to Europe in June, a significant rise from the 24,500 barrels per day recorded in May. Despite this surge, India’s total diesel exports saw a slight decline of 4% to 482,400 barrels per day.
Europe accounted for a quarter of India’s diesel shipments in June, while supplies to Asia fell by 10% to 107,800 barrels per day. Additionally, shipments to other markets, including Africa, witnessed nearly a 30% reduction. An industry analyst noted, “India’s diesel exports to Europe rebounded in June due to improved arbitrage economics to the West and weaker margins in Asia.” Overall exports of refined products from India declined by 5% in June compared to the previous month, reaching 1.19 million barrels per day. Europe received 17% of these supplies, while Asia accounted for 27%. Indian refiners, including major players such as Reliance Industries and Rosneft-backed Nayara Energy, serve both Eastern and Western markets, primarily exporting diesel, petrol, and jet fuel. The destination of these fuel cargoes is largely determined by demand and price arbitrage in various geographies.
Indian refiners generated revenues of $29 billion from diesel exports in the fiscal year 2022-23, as prices surged following the Ukraine war. However, as markets stabilised, realisations fell to $22 billion in FY24. The conflict in Ukraine prompted Europe to reduce its dependence on Russian diesel supplies, with imports from the Middle East, the US, and India filling much of the gap left by Russia. This significant shift in trade patterns underscores the strategic importance of Indian diesel in the global energy market. As Europe continues to diversify its energy sources away from Russia, Indian refiners are well-positioned to capitalise on these evolving dynamics. The increased export volumes to Europe highlight India’s growing role as a crucial supplier in the international diesel market, demonstrating the adaptability and competitiveness of its refining sector.
The outlook for Indian diesel exports remains robust, with refiners expected to continue leveraging arbitrage opportunities to maximise their returns. However, the sector must also navigate the complexities of global energy politics and market fluctuations to sustain its growth trajectory. The ongoing developments in the global energy landscape will undoubtedly shape the future of India’s diesel export strategy.
