India to continue diesel exports despite US ban threat, says Hardeep Singh Puri amid global fuel crunch

India will continue exporting diesel as planned even if Washington moves ahead with a ban on overseas fuel sales, with the country's expanding refining capacity positioning it to serve both domestic and global demand.

Oil Minister Hardeep Puri, speaking at the PAFI 13th Annual Forum in New Delhi on Thursday, said India would not walk back its export commitments.

Also read: UAE, Saudi Arabia keen to invest in India’s refining sector: Hardeep Singh Puri


"We honor our commitments," Puri said, adding that years of investment in refining capacity had left the industry well placed to sustain overseas supply.

Global diesel market under strain

The global diesel market has tightened this year under the combined weight of the US-Iran conflict in West Asia and the Russia-Ukraine war, with Moscow curbing most of its overseas diesel sales. Diesel prices have climbed sharper than crude, squeezing truckers, farmers and construction firms and adding to inflationary pressure.

US pump prices have hit record highs, prompting speculation that Washington could restrict diesel exports to hold more supply at home. President Donald Trump said this week he had asked his team to look into a shipment restriction, and the proposal is now before his economic advisers.

The European Union has flagged concern over the potential US curb, a worry that has already pushed up futures prices on expectations of a tighter market. No final US decision has been made.

With Russian supply curbed, India has overtaken Russia this year to become the second-largest supplier of seaborne diesel after the US, accounting for roughly 10 percent of global shipments, according to data from Kpler.

India's refining capacity climbing steadily

Puri pointed to state-run Indian Oil Corp's five-year supply agreement with Mauritius as proof of India's reliability as a fuel exporter, noting in a post on X that the first cargo under the deal has already reached the island nation. Reneging on such contracts, he said, would erode buyer confidence in Indian shippers.

In his X post, Puri said the country's refining capacity stands at around 267 MTPA today, is set to touch nearly 290 MTPA within a year, and is targeted to reach 320 MTPA by 2030-32, even as refining capacity shrinks in parts of Europe.

Global majors eye Indian refining sector

Puri said Saudi Aramco and Abu Dhabi National Oil Co. are in talks to invest in India's refining sector. "They want to come in," he said, noting that foreign players are seeking a stake in India's growing downstream fuel market as a condition for investment.

Also read: Oil minister Hardeep Puri calls for deeper India-OPEC energy ties

Puri also cited India's handling of the Strait of Hormuz crisis as evidence of the country's energy security planning, saying LPG supplies were tracked daily at the height of the standoff.

Coordination with UAE partners, the Ministry of External Affairs, the Indian Navy and other agencies, he said, ensured uninterrupted LPG supplies for Indian consumers throughout the crisis.