India’s fuel exports rise as European supplies fall

India’s exports of petroleum products rose to their highest level in two-and-a-half years as the maintenance season in Europe boosts demand for fuels from other sources.

India’s exports of fuels such as petrol, diesel and jet fuel rose 39% in September compared to a year earlier. At 1.5 million barrels per day (bpd), India’s fuel exports hit their highest level since March 2022, according to data from analyst firm Kpler cited by Bloomberg.

As refineries in Europe have gone into seasonal maintenance or reduced crude processing amid weak refining margins, demand for India’s exported fuel is rising, particularly in Africa, the data showed.

Refining margins in Asia fell in the first week of September to their lowest level for this time of year since 2020, which could lead to more run rate cuts at Asian refiners, including in China.

Refining margins in Europe are also under pressure, with reports that Spain’s Repsol and Italy’s Eni are considering cutting run rates.

Gasoline profit margins in Europe averaged $12.10 a barrel in August, down 61 percent from the same month in 2023, according to LSEG data cited by Reuters.

Diesel margins are even weaker, with August profit margins falling to their lowest level since December 2021.

Amid lower fuel supply from Europe, India is stepping up to fill the gap.

“The diesel arbitrage open to Europe was driven by lower supply due to planned and unplanned refinery maintenance in the region,” Serena Huang, head of APAC analysis at Vortexa, told Bloomberg.

India, the world’s third-largest crude importer, is ramping up its refining capacity, which is set to reach 6 million bpd by the end of the decade. Most of the fuel produced in India is for domestic use, but some is exported by private refiners to meet overseas requirements.

By Tsvetana Paraskova for Oilprice.com

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