Diesel exports to Europe declined to 210,000 barrels per day (bpd) in April from 262,000 bpd in March, according to energy cargo tracker Vortexa.
Europe consumes more than 40% of India's diesel exports. India's overall diesel exports fell 9% to 517,000 bpd in April from 567,000 bpd in March. Exports to Asia, however, rose 33% to 69,000 bpd in April from 52,000 bpd in March.
"Healthy exports from the Middle East and the US to Europe, higher freight costs due to the rerouting via Cape of Good Hope, as well as demand weakness in Europe will likely continue to limit India's diesel exports to Europe," said Serena Huang, analyst at energy cargo tracker Vortexa.
"Meanwhile, there are ample supplies of diesel in Asia, although refinery maintenance this quarter is expected to see lower exports from Northeast Asia, which should provide some opportunities for Indian refiners to move their cargoes East."
Indian refiners serve several countries, shipping diesel cargoes to markets that offer comparatively higher effective margins. These days tankers carrying Indian diesel mostly take the longer route to Europe via Cape of Good Hope to avoid potential attacks by Houthi rebels in the Red Sea. This inflates transportation cost and time besides lowering the competitiveness of Indian cargoes in the European market.
Since the Ukraine conflict began in early 2022, Europe has been working to replace Russian diesel with those from other countries, creating lucrative opportunities for Indian refiners.
High global prices helped Indian refiners earn revenues of USD 29 billion from diesel exports in 2022-23. After prices declined in 2023-24, India's diesel export revenues fell to USD 22 billion.
Reliance Industries and Rosneft-backed Nayara Energy are two key exporters of diesel in India.
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