India has become a significant source of diesel for Europe, especially after the ban imposed by Europe on purchasing crude oil from Russia nearly a year ago. The ban has led to challenges in diesel supply for Europe, prompting them to turn towards India to meet domestic needs. Diesel exports from India to Europe have surpassed 300,000 barrels per day, and the possibility of further growth remains.
Major Buyer of Russian Crude Oil
India stands as one of the largest buyers of Russian crude oil. Diesel exported from India is making its way to European countries through this route. However, there is no official confirmation of Russian diesel reaching Europe openly, as India procures crude oil from various other countries as well. After the raw oil is obtained, Indian refineries transform it into diesel for export, contributing to the growth of diesel supply to Europe.
Benefiting Indian Companies
According to reports, Mumbai-based Nayara Energy Limited imported nearly 60% of its total crude oil intake from Russia last year. This company is actively exporting diesel to Europe. Additionally, Reliance Industries Limited is also a major supplier of Indian diesel to Europe. Both companies meet a significant portion of their requirements from Russia.
Impact of Ukraine-Russia War
The ongoing conflict between Ukraine and Russia has severely impacted oil trading, causing disruptions in the global oil supply chain. Russia’s diesel was a lifeline for Europe, and the ban led to a shortage, compelling European nations to seek alternative sources for diesel, with India being a prominent choice. The ban on Russian oil has affected various sectors in Europe, including industry and transportation, due to a shortage of diesel.
Increasing Diesel Demand from India
The demand for diesel from India has surged as European industries strive to cope with the shortage caused by the ban on Russian diesel. Apart from India, Europe is also importing oil from the United States, Turkey, and Saudi Arabia. The decrease in demand from Europe has allowed Indian refineries to obtain Russian crude oil at discounted rates, boosting diesel production for export.