New Delhi, Sep 5 India’s diesel exports to Europe have more than doubled in August as buyers stepped up purchases to secure supplies at lower prices ahead of the European Union ban on fuels refined from Russian crude that will kick in from January 2026, according to market analysts.
India’s diesel exports surged to 242,000 barrels per day (bpd), in August which represents a more than two-fold jump over the corresponding figure for the same month in the previous year, according to figures compiled by Kpler, a global real-time data and analytics provider. The 12-month average for diesel exports has also risen by 124 per cent.
Other factors that have contributed to this surge include supply disruption caused by a surprise maintenance shutdown at Shell’s Pernis refinery in the Netherlands. The approaching winter is another reason cited by analysts for the increases in purchases.
The European Union’s 18th package of sanctions now prohibits the import of refined products made from Russian crude, which includes those that have been processed in India. The ban comes as a setback for India’s Reliance Industries and Nayara Energy, which are the main beneficiaries of fuel supplies to Europe.
As the European Union has announced an import ban on refined oil products derived from Russian crude, this means a clampdown on refined products that are processed abroad and delivered into the EU. This will prevent Russian crude oil from reaching the EU market in any form.
The EU has also lowered the Oil Price Cap for Russian crude oil from $60 to $47.6, and introduction of an automatic and dynamic mechanism for its review in the future.
The new system will ensure that the cap is always 15 per cent lower than the average market price for Urals crude in the previous period of six months, resulting in both predictability for operators and downward pressure on Russian energy revenues.
Besides, more merchant ships in Russia's shadow fleet are now listed by the EU including 3 LNG tankers that have been delisted following firm commitments that these vessels will no longer engage in the transport of Russian fuels.
Meanwhile, crude prices declined on Friday with the benchmark Brent crude trading at $66.80 a barrel, while U.S. West Texas Intermediate crude fell 0.36 per cent, to $63.25. The decline in crude oil prices this week has come in the backdrop of expected production increase by the OPEC+ cartel and the increase in US stockpiles.
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