Indian refiners shift diesel supplies to Africa and Asia

India's diesel exports to Europe - its largest and most lucrative market - is declining, forcing exporters to shift supplies to Africa and Asia.

Indian refiners exported about 140,000 barrels per day (bpd) of diesel in the first nine months of this fiscal year, a 42% drop from about 245,000 bpd in the year-earlier period, according to energy cargo tracker Vortexa. During this period, Europe absorbed 27% of India's diesel exports, declining from 44% in the previous year.

"This trade shift in FY25 was driven by increased refinery output from within Europe as well as the US Gulf Coast. US Gulf Coast refiners sent significant volumes to Europe and continue to do so," said Rohit Rathod, an analyst at Vortexa.



Falling supplies to Europe led exporters to divert supplies to Africa, which emerged as the largest destination for Indian diesel last year. Africa received about 130,000 bpd of Indian diesel during April-December 2024, up 25% from the previous year. This lifted Africa's share in India's diesel exports to 32% from 24%.

Diesel exports to the Asian market, which includes South Asia, Southeast Asia and Northeast Asia, rose by about 14% to about 90,000 bpd during the period under review. Asia's share increased to 17% from 15%.

Attacks by Houthi rebels on ships in the Red Sea presented another challenge to Indian exporters who had to take a longer route around the Cape of Good Hope, increasing the voyage time to Europe by a fortnight compared to transit through the Suez Canal. This placed additional costs on exporters but worked as long as cargoes to Europe fetched a premium. But with supplies rising from Europe's own refiners and big volumes arriving from the US, margins on diesel shrank in Europe, according to analysts.

Diesel comprises a little more than 40% of India's overall refined products exports.

The shift in diesel trade meant Europe ceased to be the top destination for Indian refined products. Its share in India's refined product exports shrank to 17% this fiscal from 28% in the previous year. Asia's share rose to 29% from 25% and Africa's increased to 18% from 17%. The Middle East's share rose to 17% from 14%.

India is a large exporter of diesel, petrol, jet fuel, and naphtha. Last fiscal year, it earned $48 billion from petroleum product exports. Reliance Industries is the largest exporter of fuels in the country. Rosneft-backed Nayara Energy and state-run refiners also export some products.