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India’s diesel shipments to Europe hit record highs

by Patria

Citing tanker tracking data and analysts, Reuters reported on Wednesday that India’s diesel exports loaded for Europe hit a record high in September amid open arbitrage for westbound shipments.

According to vessel tracking data from LSEG, Vortexa and Kpler cited by Reuters, diesel cargoes loaded from India for Europe last month averaged between 280,000 barrels per day (bpd) and 303,000 bpd, or about half of all Indian diesel shipments in September.

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Simultaneously, Indian diesel shipments east to Singapore collapsed in September.

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The east-west arbitrage on diesel futures in Europe and Asia jumped last month, incentivizing traders to ship more of the Indian-produced fuel to Europe, analysts told Reuters.

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But the differentials have narrowed in the past week, meaning India’s diesel shipments to Europe in October are unlikely to repeat September’s highs, they added.

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High Indian diesel exports to Europe last month could help Europe stock up on fuel ahead of winter, while potentially easing pressure on refining margins in Asia, traders and analysts who spoke to Reuters said.

Higher shipments in September may also have been the result of Russia’s temporary ban on diesel exports to most markets, including Turkey, Serena Huang, head of APAC analysis at Vortexa, told Reuters.

At the end of last week, Russia lifted the ban on most of its diesel exports, two weeks after it announced export restrictions on diesel and gasoline in a bid to curb soaring prices at home.

The diesel and gasoline export ban, imposed on September 21, affected Russia’s diesel exports, which were diverted away from the EU after the embargo was imposed in February. Russia also supplies diesel to Turkey, the Mideast, North and West Africa, and Brazil.

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