India’s exports of petroleum products increased by almost 3% to 42 million tonnes during April to November from 40.9 million tonnes in the corresponding period of last fiscal, as per data from the Petroleum Planning and Analysis Cell. In November, however, the shipments were down by 7% to 5.3 million tonnes from last year, driven by a significant fall in the supplies to Europe.
In value terms, the country exported $31.2 billion of petroleum products in April-November this fiscal, down 1.3% from $31.6 billion in the year-ago period.
Imports of refined oil products increased 6.3% to 33.9 million tonnes, up from 31.9 million tonnes in Apr-Nov 2023. Import bill for the refined oil products also increased by 6.6% to $16.1 billion against the corresponding period of last year.
Europe is increasingly turning out to be the brightest market for Indian oil products exporters that have capitalized on the shortages of diesel and other fuels due to geopolitical tensions and are shipping plentiful cargoes, a trend that is set to spill over to next year, according to S&P Global Commodity Insights.
“Refineries in India have ramped up exports to Europe and the Mediterranean since Europe and the UK banned Russian diesel in 2023. Indian exporters have weathered the Red Sea challenges earlier this year, diverting cargoes to Europe via the Cape of Good Hope on larger clip sizes,” said Benjamin Tang, head of liquid bulk at S&P Global Commodities at Sea.
As per S&P’s Commodities at Sea data, India’s gasoil exports to Europe touched 215,000 barrels per day in October, after reaching a high of 282,000 b/d in September. Last month, only 104,000 b/d was loaded out of Indian ports for Europe.
According to Xavier Tang, market analyst at Vortexa, exports to Europe declined last month as the diesel arbitrage between the East and the West narrowed.
The country’s exports of crude oil products, which recovered in September, have once again started to follow a declining trend. Even though analysts fear a supply glut in the oil market 2025 onwards, rising uncertain geopolitical tensions and weak demand outlook from the world’s top consumers pose threats to the country’s exports going forward.
Union minister for petroleum and natural gas Hardeep Singh Puri has said on multiple occasions that there is no shortage of oil in the market but if there are geopolitical tensions, it may lead to an increase in the cost of freight for shippers.
Meanwhile, the domestic consumption of petroleum products in April-November increased to 157.5 million tonnes from 152.4 million tonnes in the same period in FY24, as per PPAC.
India primarily supplies petroleum products to countries in Europe and Asia. The EU implemented in December 2022 a price cap and an embargo on Russian crude oil imports in a bid to curb Russia’s revenues for its war with Ukraine. However, this excluded refined petroleum products derived from Russian crude.
The spike in Indian oil products exports to Europe lately coincides with Russia becoming the biggest supplier of crude to India, shipping an average 1.7 million b/d of crude in the January-September period, as per S&P.