Indian refiners are entering a war-driven “golden era”, with refined petroleum product exports surging to a five-year July high as supply disruptions in Russia and West Asia push up global fuel margins and open lucrative markets across Europe and South America.
India exported 1.527 million barrels per day (bpd) of refined products in July, up 23.2% from 1.239 million bpd a year earlier, according to Kpler data. The volume was nearly 19.5% above the previous five-year July high of 1.278 million bpd recorded in 2024.
Shipments were also 28% higher than the five-year July average of 1.192 million bpd. India exported 1.264 million bpd in July 2023, 1.062 million bpd in 2022 and 1.118 million bpd in 2021.
Exports rebounded from 919,900 bpd in May to 1.048 million bpd in June and surged 45.7% month-on-month to 1.527 million bpd in July.
The export surge comes as the US-Iran war, disruptions to Middle Eastern refining and Russia’s diesel export ban tighten global product availability. The conflicts and lower Chinese refinery runs removed nearly 5 million bpd, or about 6%, of pre-war global refining output, sending margins for diesel, petrol and jet fuel sharply higher.
“Refiners are earning strong margins from exports, which should help offset losses incurred in the first quarter. Diesel cracks of around $45-50 per barrel are very healthy and provide a substantial earnings cushion,” a refinery official said, requesting anonymity.
The export windfall could soften the blow for state-run refiners, with IndianOil, BPCL and HPCL reporting combined June-quarter net losses of ₹18,149 crore, as the Iran war’s impact proved far milder than initially projected.
The sharp increase in cracks has strengthened export economics for Indian refiners at a time when limited product availability is intensifying competition for cargoes across global markets.
“Russia’s diesel export ban, the US-Iran war and strong global demand have created a golden period for Indian refiners, with exports reaching several European and South American markets, including Brazil,” said Prashant Vasisht, senior vice-president and co-group head, corporate ratings, ICRA Ltd.
“When a war begins and domestic availability needs to be safeguarded, the government has the option of imposing special additional excise duty to discourage exports. As of now, however, diversified crude sourcing and supplies tied up by refiners mean there is no near-term concern over availability,” he said.
India’s refining advantage has been reinforced by ample crude supplies, the completion of planned maintenance at key refineries and seasonally weaker domestic demand during the monsoon, leaving more petrol, diesel and other products available for exports.
“Ample crude availability, coupled with an exceptionally strong refining-margin environment and seasonally weak domestic demand during the monsoon, supported India’s product exports, which reached a seasonal five-year high,” said Nikhil Dubey, lead analyst for oil markets at Kpler.
“The completion of maintenance at Nayara Energy and Reliance Industries in previous months also boosted refinery runs, further supporting export volumes,” Dubey added.
Russia’s export restrictions, imposed after Ukrainian drone attacks disrupted refinery operations, have further tightened diesel markets. Russia is the world’s second-largest diesel exporter, and a drop in its shipments has increased demand for cargoes from alternative suppliers, including India.
The current boom, however, is being driven by war, damaged refining infrastructure and product scarcity rather than a permanent shift in industry fundamentals. Repairs to affected facilities could take months, keeping margins elevated in the near term, while any recovery in supplies from Russia, West Asia and China could eventually narrow the export opportunity.