Europe Depends On Indian Diesel As US, Saudi Supply Dips
Though Europe implemented a ban on the majority of oil shipments from Russia a year ago, media reports suggest that it’s procuring diesel that may well have been made from Russian crude.
The region's imports of diesel from India are projected to reach 305,000 barrels per day, marking the highest level since at least January 2017. India, in turn, is one of the largest buyers of Russian crude.
Although it cannot be definitively stated that these molecules originated in Russia, given that India processes oil from various sources, Moscow's deliveries have empowered Indian refineries to produce abundant diesel, thereby boosting exports.
In November, Europe received a rare shipment from Nayara Energy, based in Mumbai, which sourced nearly 60 per cent of its crude from Russia this year, as per news reported by Bloomsburg.
Reliance Industries, the leading supplier of Indian diesel to Europe, derives over a third of its crude from Russia, according to the data.
This upsurge in diesel imports from India underscores a significant transformation in oil trading following the Kremlin's conflict in Ukraine.
A year ago, Russia served as Europe's primary diesel supplier—a critical fuel for both the industrial and transport sectors. Subsequently, the European Union imposed bans on most seaborne imports of Russian crude in December and oil products in February.
In response to these restrictions, Europe and the UK have sought diesel supplies from alternative markets. India, emerging as a key contributor, is filling the supply gap as European imports from the US, Turkey, and Saudi Arabia decline in November.
Notably, arrivals of Saudi diesel are expected to decrease to around 94,000 barrels per day, the lowest since February 2020.
The share of Indian diesel flows to Asia now constitutes approximately 19 per cent of the country's total exports of the fuel, compared to 33 per cent in the previous year. Much of this volume has been redirected to Europe.
In total, Europe's imports of diesel and gasoil for this month are anticipated to rise to 935,000 barrels per day, reflecting a 5 per cent increase from October, Bloomberg stated.
