Amid the ongoing US-Iran conflict, India’s fuel exports have hit a 1-year high. Exports of refined petroleum products climbed to a one-year high in July, supported by strong diesel refining margins, Russia’s ban on diesel exports and abundant crude availability during the temporary ceasefire in the Iran conflict. This enabled domestic refiners to increase overseas shipments.According to shipping data from analytics firm Kpler, India exported 1.53 million barrels per day (bpd) of refined fuels during July. This is about 27% higher than the average monthly volume over the previous 12 months. Incidentally, India’s crude oil imports from Russia also hit an all-time high of 2.8 million barrels per day in July.The July export shipment volume was the highest recorded for the month since Kpler began tracking the data in 2017. “Exceptionally strong diesel margins, following the ban on Russian diesel exports, incentivised exports (from India), with cargoes headed to regions previously supplied by West Asia and Russia to fill the supply void,” Nikhil Dubey, lead analyst for refining at Kpler told ET.
Middle East conflict and evolving trade patterns
The conflicts in West Asia and Europe have significantly altered global fuel trade patterns by lifting prices and opening new export opportunities. Supply disruptions affecting Russia and Gulf producers, two of the world’s major suppliers of refined petroleum products, have reshaped international trade flows.Ukraine’s strikes on Russian refineries have compelled Moscow to halt exports of petrol and diesel, increasing its reliance on imports, including supplies from India, to meet domestic fuel requirements. According to Dubey, countries such as Turkey, which have traditionally depended on Russian fuel, are now replacing those supplies with cargoes from India.“Europe remains short on diesel supplies and typically relies on imports from West Asia; however, those supplies are currently constrained due to regional turmoil,” he noted, adding that record-high diesel refining margins had encouraged higher export volumes to Europe.Exports also received a boost from “ample crude availability following the arrival of stranded cargoes that were released during the brief Iran-US truce,” Dubey said, noting that the additional crude supported higher refinery utilisation rates. He added that the completion of maintenance shutdowns at refineries operated by Reliance Industries (RIL) and Nayara Energy enabled both companies to process larger volumes of crude.Reliance Industries accounts for nearly three-fourths of India’s refined fuel exports. Nayara Energy, backed by Rosneft and the country’s other major fuel exporter, reportedly exported petroleum products to Russia last month.
