India’s diesel shipments to Europe likely touched a record in September, as refiners took advantage of strong western margins during the refinery maintenance season, shiptracking data indicated on Thursday.
Exports from India, Asia’s key swing supplier to Europe, were estimated at 1.3 million to 1.4 million metric tonnes (9.7 million to 10.4 million barrels), according to data from LSEG, Kpler, and two market sources. This is the highest on record since such data began being tracked in 2017.
Indian refiners, sourcing about a third of their crude from Russia, have ramped up processing rates and redirected surplus products abroad. Both diesel and gasoline exports rose to multi-year highs, with total diesel shipments in September nearing 3 million tonnes, the strongest in five years, Kpler data showed.
Profit Motive Drives Flows Westward
The east-west diesel spread averaged USD 45 per tonne in September, sharply higher than less than USD 30 in August, according to LSEG pricing data. The wider arbitrage encouraged traders to divert cargoes to Europe, where refinery maintenance tightened supply.
Refining outages in Europe are set to rise further, with crude processing capacity of around 550,000–600,000 barrels per day expected to be offline in October, up from about 400,000 bpd in September, according to a report.
At the same time, freight rates eased. The cost of shipping 90,000 tonnes of refined fuel from India to Europe fell to USD 3.25–3.5 million in the second half of September, compared with USD 4–4.2 million in late August and early September, shipbroking data showed.
The surge in exports has tightened supplies in Asia, pushing 10-ppm sulphur gasoil cash premiums to nearly USD 1.50 a barrel, the highest level in two months.
Outlook Hinges On Domestic Demand And EU Policy
Looking ahead, analysts expect India’s transport fuel exports to ease in October as domestic consumption rises during the Diwali festive season. Ivan Mathews, head of APAC analysis at Vortexa, noted that strong product cracks compared to last year could still incentivise refiners to maintain high runs and keep some export flows intact.
Traders remain cautious about volumes on the India-Europe route, as uncertainty lingers over the European Union’s 18th sanctions package, which will bar refined fuels produced from Russian oil. Market sources added that any shortfall could easily be filled by Middle East barrels, which remain widely available.
