European Diesel Imports Surge from India Amidst Russian Crude Ban
Image Source: The Economic Times
Despite Europe’s embargo on most oil shipments from Russia, the continent is experiencing a surge in diesel imports from India that might have roots in Russian crude oil.
Market data from Kpler indicates that Europe’s diesel imports from India are projected to reach a daily rate of 305,000 barrels, marking the highest since at least January 2017. While it’s challenging to ascertain the precise origin of these diesel molecules, the influx suggests that Indian refineries, fueled partly by Russian crude, have enhanced diesel production, resulting in amplified exports.
Notably, November arrivals in Europe encompass an uncommon shipment from Mumbai-based Nayara Energy Ltd., which procured nearly 60% of its crude from Russia in 2022, per Kpler data. Another major supplier, Reliance Industries Ltd., sources over a third of its crude from Russia, indicating a substantial Russian influence on Indian refining activities.
This notable uptick in Indian diesel imports underlines a notable shift in oil trading dynamics post-Kremlin’s conflict in Ukraine. A year ago, Russia was the primary diesel supplier to Europe before the EU imposed bans on most seaborne Russian crude in December and extended the restrictions to oil products in February.
Consequently, Europe and the UK turned to alternative markets for diesel supplies. India emerged as a significant contributor to fill this supply void as imports from the US, Turkey, and Saudi Arabia dwindled in November. Saudi diesel arrivals are anticipated to decline to approximately 94,000 barrels per day, the lowest since February 2020.
Eugene Lindell, head of refined products at Facts Global Energy, highlighted the sharp drop in Saudi diesel availability due to planned local refinery maintenance, which consequently fueled European interest in Indian diesel.
Amidst the global oil landscape reshaping due to the ban on Russian oil, Indian refiners have found a competitive edge by acquiring Russian crude at discounted rates and leveraging it to supply diesel to high-demand markets like Europe.
Viktor Katona, lead crude analyst at Kpler, emphasized that Indian refiners purchasing 1.6-1.8 million barrels a day of Russian crude possess a competitive advantage, enabling them to redirect substantial diesel volumes to Europe. As a result, Europe’s diesel and gasoil imports for November are poised to surge to 935,000 barrels a day, showcasing a 5% increase from October, according to Kpler data.
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- Harshit Tokas is a Political Science and International Affairs Post-Graduate with a passion for understanding and analyzing complex political landscapes. Skilled in research, data analysis, and policy development. Eager to contribute his knowledge and insights to drive positive change.
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