India has vowed to honour overseas commitments for petroleum products despite the looming possibility of 100% tariffs from the United States. The country has emerged as a critical supplier of diesel for the world as war chokes the Strait of Hormuz and Russian crude remains off-limits for many. The world’s third-largest crude oil consumer and importer now handles diversified supplies across 41 countries while continuing to invest in refining.
“We will continue with product exports and honor our export commitments,” Union Minister Hardeep Singh Puri assured during an industry event last week.
The Oil Minister noted that global crude supplies had remained available despite concerns that the Strait of Hormuz could be fully closed. Puri recalled the apprehension about how India would survive if both the Strait of Hormuz and the Bab al-Mandab Strait in the Red Sea were closed.
“In the US, diesel prices went up $6… If you look at a neighbouring country—just compare the rates. Look at the prices in 2014, 2021, and 2026. This isn’t just about political rhetoric. We have 107,000 retail outlets across the country; not a single one ran dry,” he added.
According to Puri, India will continue to invest in refining even as plants shut in parts of Europe. This would enable the country to meet rising domestic demand while remaining a major supplier to global markets. The Oil Minister added that the country was also fielding outside interest for investment in Indian refineries.
“We expanded crude sourcing from 27 countries to 41, strengthened LPG security by increasing domestic production from around 34,000 tonnes a day to 55,000 a day, ensured peak refining capacity of around 267 million tonnes per annum,” Puri reiterated.
Why is the world facing a diesel crunch?
The global diesel market has been squeezed by the ongoing US-Israeli war against Iran as well as the Russia-Ukraine conflict. The industrial fuel — considered vital for trucking, agriculture and construction — has rallied much more than crude oil, hurting businesses, farmers and consumers, while fanning inflation.
The situation threatens to worsen as the United States “very seriously” considers a 90-day ban on diesel exports ahead of the November midterm elections. Prices have shot to record highs in Europe and the US as multiple wars rage, becoming a massive issue for poll-bound Republicans.
“I’ve said let’s not send out the diesel. We make a lot of diesel… I’ve called for it. I’ve called for it within my people…That can oftentimes lead to a little bit of an increase on gasoline for cars, so we’re looking at it very seriously. We may do it,” Trump insisted at different times recently.
India overtakes Russia as supplier
Russian diesel exports have been largely absent since July — with officials recently extending the ban till January 2027. The curbs were introduced to support the domestic fuel market after repeated Ukrainian drone attacks on oil refineries triggered fuel shortages and price spikes. Data shared by Vortexa also indicates that Russia’s seaborne diesel/gasoil exports held flat m-o-m at 150kbd in August — down 610kbd y-o-y and 81% below the five-year seasonal average levels as the export ban continued to bite.
According to Kpler, India has now overtaken Russia as the top supplier after the United States.The country has become an increasingly important source of fuel and now accounts for about 10% of global shipments. Vortexa also highlighted Europe’s growing dependence on diesel supplies from India — making up 60% of the fuel transiting the strategic Bab-el-Mandeb route in August.
The energy analytics firm also reported in late August that around 260 kt (55%) of imported gasoline had reached Russia on sanctioned tonnage that month — led by India, Turkey, and Morocco. All India-origin gasoline cargoes Russia imported were reportedly carried on sanctioned fleets and involved dark ship-to-ship transfers in the Mediterranean.
The West Asia conflict and Hormuz blockade has now crossed the eight month mark while historically low US and ARA (Amsterdam-Rotterdam-Antwerp) gasoil inventories have forced Atlantic basin refiners into an aggressive operational stance.
Mapping India’s diesel exports
India is the world’s fourth largest refiner, with an installed capacity of 258.1 million tonnes per annum across 22 operational refineries. According to data released by PIB at the end of May, domestic consumption was 243.2 million tonnes in FY26. Meanwhile petroleum product exports stood at 61.5 million tonnes in the same year — making India one of the largest exporters of refined products globally.
Data released by the Commerce Ministry in August indicates export of petroleum products increased 67.64% from $ 4.13 billion in July 2025 to $6.92 billion in July 2026. The country has a refining capacity of approximately 5.4 million barrels a day and imports about 90% of the crude it processes.
Import costs have also surged during this time — with India’s crude oil bill rising 56.5% year-on-year to $63.4 billion — despite volumes remaining largely unchanged in April-July this year. Growing geopolitical instability has led to a surge in global crude oil prices, combined with shipping disruptions and escalating freight rates and war-risk insurance costs as the West Asia conflict continues. Oil Ministry data also notes that India’s petroleum product exports fell 40% year over year to 2.7 million metric tons in August. Exports declined 46.7% year over year to 11.2 million mt during April-August, while exports for fiscal 2025-26 (April-March) fell 9.2% to 46.2 million mt.