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13 Oct, 2023 12:26

Indian diesel flows to EU reach all-time peak amid rise in oil imports from Russia

Deliveries averaged 290,000 barrels per day in September, according to ship-tracking data
Indian diesel flows to EU reach all-time peak amid rise in oil imports from Russia

EU purchases of Indian diesel surged to an all-time high in September, Reuters reported on Thursday, citing ship-tracking data from Vortexa, Kpler, and LSEG. The increase comes after New Delhi boosted imports of Russian oil, much of which is used to make Indian diesel.  

According to the news agency, Indian diesel deliveries to the bloc totaled between 280,000 and 303,000 barrels per day (bpd) in the reporting period, roughly half of India’s total diesel exports for the month.

This trade flow was mainly attributed to the opened arbitrage for India-origin cargoes to head West, with traders potentially preparing for the loss of Russian diesel barrels to Türkiye as well due to the export ban,” Vortexa’s head of APAC analysis, Serena Huang, told Reuters.

In September, Moscow introduced a diesel and gasoline export ban in order to stabilize the domestic fuel market. The restrictions on diesel exports were partially eased on October 6.

India’s diesel exports to the EU in October have thus far been significantly lower than last month, at around 75,000 bpd. However, industry experts attribute the drop to refinery turnarounds and the surge in local demand due to the Diwali festive season.

Much of India’s diesel is made from Russian oil, imports of which by local refineries surged by 80% year-on-year in September, according to the Financial Express. Vessel-tracking data from Vortexa showed that New Delhi bought an average of 1.56 million bpd of Russia’s Urals oil last month, compared to 865,000 bpd in the same period last year.

India joined China as Russia’s largest oil importers earlier this year, taking advantage of discounts as Moscow sought to attract new markets after losing Western buyers amid Ukraine-related sanctions. Russian Deputy Prime Minister Aleksandr Novak told RT Arabic on Friday that Moscow has since slashed the discounts, which currently amount to $11-12 per barrel, compared to as much as $38 offered at the beginning of the year. However, analysts suggest that New Delhi will continue to ramp up purchases of Russian oil, as it is still cheaper than crude from the Middle East.

For more stories on economy & finance visit RT's business section

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