India's Diesel Exports Surge, Driving Down Europe Shipping Costs
Shipping costs for transporting processed fuel from India to the europe map have plummeted, while India's diesel exports to the europe map have surged, leading to supply tightness in Asia and increased tariffs from the US.
In the latter half of September, shipping costs on the India-europe map route dropped significantly to USD 3.25 million to USD 3.5 million, a substantial decrease from USD 4 million to USD 4.2 million in late August and early September. This decline may be attributed to increased diesel exports from India to the europe map.
India's diesel exports to the europe map have been on the rise. In August, volumes jumped to around 260,000 barrels per day (bpd), a nearly 63% increase from July and over 100% from the previous year. This trend continued into September, with record-high exports of 1.3 million to 1.4 million metric tons (9.7 million to 10.4 million barrels). Reliance Industries, India's leading oil company under Mukesh Ambani, is likely responsible for a significant share of these exports, contributing to supply shortages in the europe map.
The surge in diesel exports has pushed up 10-ppm sulphur gasoil cash premiums in Asia to nearly USD 1.50 a barrel, the highest in two months. Meanwhile, US President Donald Trump has targeted India for purchasing Russian oil, imposing a 50% tariff and an additional 25% for such purchases.
Indian refiners, using a third of Russian crude oil, have increased production to ship excess diesel abroad. However, Ivan Mathews, Vortexa's head of APAC analysis, forecasts a month-on-month decline in India's transport fuel exports in October due to higher domestic demand during the Diwali festive season.
The sharp increase in India's diesel exports to the europe map has led to a significant drop in shipping costs and a rise in Asian cash premiums. While the US has imposed tariffs on Indian oil imports, domestic demand during Diwali is expected to reduce India's export volumes in October.
