In April, India witnessed a notable decline of 11% in its exports of refined oil products, recording a daily output of 1.21 million barrels, as per data provided by Kpler.
This decline can be primarily attributed to the surge in domestic demand coupled with weaker export margins, posing a significant shift in the country’s petroleum trade dynamics. Notably, exports to Asia and Europe, two of India’s major destinations, also witnessed a decline, with shipments dropping by 25% and 3.4% respectively on a month-on-month basis. The slowdown in exports to these regions reflects a broader trend of shifting trade dynamics amidst evolving global geopolitical scenarios. In value terms, petroleum product exports recorded a significant decline of 13.6% in FY24, amounting to $84.1 billion, contrary to the rising trend observed in previous years. Despite the decline in value, exports in volume terms continued to grow, underscoring India’s significance as a key supplier of refinery products globally. The decline in exports was particularly evident in diesel and gasoline segments, which saw a month-on-month drop of 13% and 17% respectively in April. However, jet fuel exports experienced a marginal increase of 3.7% during the same period.
Asia’s share in Indian petroleum product exports witnessed a decline to 36.8% in April, while Europe’s share increased slightly to 27.2%. The rise in Europe’s share, albeit modest, suggests a shifting preference towards alternative suppliers amidst changing global trade dynamics. The recent tensions at the Red Sea have further complicated trade routes, prompting Indian shipments to Europe to opt for longer routes via the Cape of Good Hope, resulting in increased shipping costs. This development has impacted India’s export volumes and freight expenses, adding to the challenges faced by the petroleum industry. Despite these challenges, India has emerged as a significant fuel supplier to Europe in recent months, leveraging geopolitical shifts and aligning with European countries’ boycott of Russian supplies post the Ukraine conflict. Looking ahead, India’s domestic demand for petroleum products is projected to continue growing, further shaping the country’s role in the global energy landscape.
