India's diesel exports hit 13-month high amid Iran war: How refiners are cashing in on supply disruptions

India's diesel exports reportedly surged to a 13-month high in October as domestic refiners capitalised on tightening global fuel supplies and elevated international prices amid disruptions caused by the West Asia conflict and the Russia-Ukraine war.

Preliminary vessel-tracking data from commodity analytics firm Kpler, cited by The Indian Express, showed that India exported an average of 0.71 million barrels per day (bpd) of diesel between October 1 and 29. This marked a 19.6% increase over September and an 8.1% rise compared with the corresponding period last year.

The jump in shipments comes at a time when disruptions to energy supplies from West Asia and a sharp reduction in Russian fuel exports have tightened the global diesel market.

With international refining margins remaining attractive, Indian refiners have stepped up overseas sales, positioning the country as the world's second-largest diesel exporter, according to The Indian Express.

Why are India's diesel exports rising?

The surge in India's diesel exports is being driven by a combination of supply disruptions in major energy-producing regions and stronger returns from international markets.

The conflict in West Asia, which has continued for eight months, has disrupted global flows of crude oil, petroleum products and natural gas. The situation has been compounded by the Russia-Ukraine war, with Ukrainian drone attacks targeting Russian energy infrastructure and damaging refineries, affecting Moscow's ability to maintain diesel exports.

Russia, previously the world's second-largest diesel exporter, has curtailed shipments, leaving a gap in international markets. Indian refiners have stepped in to capture a larger share of this demand.

The importance of diesel to the global economy has further amplified the impact of these supply disruptions.

Reliance Industries accounts for nearly 78% of India's diesel exports

Private-sector refiner Reliance Industries Ltd (RIL) accounted for the lion's share of India's diesel exports in October, highlighting the dominance of private refiners in the country's overseas fuel trade.

Kpler data cited in the report showed that Reliance exported approximately 0.55 million bpd between October 1 and 29, accounting for nearly 78% of India's total diesel shipments during the period.

The company's diesel exports rose 12% sequentially compared with September and were up 32.5% from the year-ago period.

Reliance operates the Jamnagar refining complex in Gujarat, the world's largest single-location refining hub.

This has positioned the company as a major supplier to overseas petroleum markets, particularly when disruptions in other exporting regions create opportunities for alternative suppliers.

Public-sector refiners also step up diesel exports

The increase in overseas shipments was not restricted to private-sector players. Public-sector refiners also expanded diesel exports in October, taking advantage of stronger international margins.

Kpler data showed that Mangalore Refinery and Petrochemicals Ltd (MRPL) increased its diesel exports to approximately 38,000 bpd in October, compared with around 1,000 bpd in September.

Indian Oil Corporation Ltd (IOC) recorded a sharp 464% month-on-month increase in exports to approximately 53,000 bpd. Hindustan Petroleum Corporation Ltd (HPCL), meanwhile, raised its shipments by 16.3% to around 26,000 bpd, according to the report.

Nayara Energy, however, bucked the trend. Its diesel exports declined 42.4% month-on-month to approximately 40,000 bpd, the report noted.

The increase across several refiners suggests that stronger international diesel margins have encouraged both public- and private-sector companies to tap overseas demand.

However, the scale of Reliance's shipments underlines the significant role private refiners play in India's fuel exports.

How are the Iran war and Russia-Ukraine conflict affecting global diesel supplies?

The two conflicts have added pressure to an already sensitive global energy market, disrupting supply chains and increasing uncertainty over the availability of refined petroleum products.

West Asia remains a critical region for global energy supplies. The ongoing conflict has affected energy flows and raised concerns over the security of shipping routes and infrastructure, adding to volatility in international fuel markets.

At the same time, Ukrainian drone attacks on Russian energy infrastructure have disrupted refinery operations, limiting Russia's ability to supply refined products, including diesel, to international buyers.

Together, these disruptions have created an opening for countries with substantial refining capacity and established export networks.

India, with its large refining base and access to international markets, has been able to increase shipments and benefit from the tighter global supply-demand balance.

Will India's diesel exports remain strong?

The outlook for India's diesel exports will depend largely on how global supply disruptions evolve and whether international refining margins remain attractive.

Industry experts and analysts cited in the report expect shipments to stay elevated in the coming months if shortages persist in international markets.

However, India's growing domestic fuel requirements could limit the extent to which refiners can increase overseas sales. Diesel remains a critical fuel for India's transport, agriculture, construction and industrial sectors.

For Indian refiners, the current market presents an opportunity to benefit from supply disruptions elsewhere.