Record high imports of crude oil from Russia in fiscal 2022-23 helped India’s refiners boost exports of diesel and jet fuel to Europe as the continent shunned Russian products, preliminary ship-tracking data from Kpler and Vortexa showed.

Access to cheap Russian crude has boosted output and profits at Indian refineries, enabling them to export refined products competitively to Europe and take a bigger market share. Europe typically imported an average of 154,000 barrels per day (bpd) of diesel and jet fuel from India before Russia’s invasion of Ukraine. That increased to 200,000 bpd after the European Union banned Russian oil product imports from Feb. 5, Kpler data showed. India’s imports of Russian crude in March rose for the seventh straight month to end out the fiscal year as the top supplier to India, displacing Iraq for the first time, the data showed. Indian refiners, which rarely bought Russian oil previously due to high transport costs, imported 970,000-981,000 bpd of it in 2022/23, accounting for more than a fifth of overall imports at 4.5-4.6 million bpd, Kpler and Vortexa data showed. Imports from Iraq slipped to 936,000-961,000 bpd from nearly 1 million bpd in 2021/22, the data showed. While Russia’s flagship grade Urals make up the bulk of India’s purchases, refiners are also importing lighter grades from Russia’s Far East and Arctic grades such as Sokol, Arco, Novy Port, and ESPO blend. Russia’s largest oil producer Rosneft (ROSN.MM) and top Indian refiner Indian Oil Corp (IOC.NS) have signed a term deal to substantially increase and diversify oil grades delivered to India.

As Europe’s ban kept Russian products out, India’s diesel exports to the continent rose 12-16% to 150,000-167,000 bpd in the last fiscal year, the Kpler and Vortexa data showed. That accounted for about 30% of India’s total gasoil exports, up from 21-24% a year earlier, the data showed. The key European buyers of Indian diesel are France, Turkey, Belgium, and the Netherlands, the Kpler data showed. Europe accounted for about 50% of India’s jet fuel exports, or around 70,000-75,000 bpd in 2022/23, up 40,000-42,000 bpd the previous year, the data showed.

Besides increasing exports to Europe, India has also boosted vacuum gas oil (VGO) shipments to the U.S. The U.S. took about 11,000-12,000 bpd of VGO in 2022/23, or 65-81% of India’s overall exports of the refining feedstock that can be processed further to produce fuels such as gasoline and diesel, the data showed. In 2021/22, India exported only around 500 bpd of VGO to the United States.

However, India’s total annual refined fuel exports in 2022/23 were lower than a year earlier as some refiners shut units for maintenance in the latter half of 2022.

Reports on everything from how Asia’s fuel use recovers from the fallout of COVID-19 to tracking how the global energy transition impacts refinery expansion plans and fuel supplies in the coming decades. Mohi analyzes data to produce insights into an array of topics spanning refinery operations and profitability through to global oil trade flows and fuel storage. Also, looks at the electrification of the global auto fleet and its impact on fuel supply chains, and the build-out of petrochemical capacity by refiners trying to reduce dependence on fuel sales.

The West has imposed sanctions on Russia and Iran for various reasons. However, it is also true that some countries, including India, have violated these sanctions by continuing to trade with these countries. It is important to note that violating sanctions imposed on other countries is a violation of international law and can have serious consequences. 

It is important to note that countries can have different priorities and interests, and sometimes they might prioritize their own economic interests over international sanctions. In the case of India, the country has been trying to diversify its sources of energy and reduce its dependence on expensive oil imports. Buying cheaper fuel from Russia and Iran has enabled India to save money and invest in its economic development. But, should this exemption be granted to all other nations? Why discrimination among states?

Despite all favors, India’s poor quality and corrupt practices have affected its international reputation and market share. 

In terms of the issue of expensive fuel and the need to support developing countries, it is true that high energy prices can have a significant impact on the economies and livelihoods of people in these countries. While it is important to address the issue of expensive fuel and support developing countries, it is also important to respect international law and promote transparency and accountability in business practices.

India is an opportunist nation and availed all possibilities of importing cheaper fuel from Iran and Russia, ignoring international bindings. Yet the US and its allies are turning a blind eye to India’s actions because they want India to counter China, contain China, and resist the rise of China. Unfair!

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