Amid a looming global energy crisis, India’s diesel exports to Europe have increased post Russia’s invasion of Ukraine, according to a report by Refinitiv’s Commodity Research.

The ‘Special Oil Report and Analysis’ for November 2022 said, “Indian refiners have taken advantage of the strong diesel margins from the onset of the invasion and raised their exports to Europe, averaging at 730,000 mt/month post-invasion, or 21% of its total exports of 2.64 million mt/month, peaking at a high of 1.1 million mt in March, versus the pre-invasion average of 570,000 mt/month.”

According to the report, the Indian refiners are taking advantage of both strong gasoil margins, which saw front-month 10-ppm gasoil/Dubai cracks soared to multiple record-highs that culminated in the all-time high of above $70 per barrel, and steeply discounted Russian crudes, which they have imported at almost 10 times the volume vs pre-invasion levels, at 2.82 million mt/month during March- September.

“Runs averaged at 99.86% of the country’s 5.14 million bpd capacity post-invasion, versus the pre-invasion average of 94.26%. Gasoil output averaged at 9.75 million mt/month for March-August and hit a record-high of 10.57 million mt in March, well above the pre-invasion average of 8.95 million mt/month,” the report said.

However, only private refiners Reliance and Nayara Energy can produce EU winter-specification diesel. The other state-owned refiners have focused their output to cover domestic demand, which is also rising in October after the low-demand monsoon season ended.

Reliance has been the country’s largest importer of Russian crudes and is also its largest diesel exporter. Its 5.68 million mt/month capacity plant has been running at 93.8% post-invasion, above the pre-invasion average of 92.3%, but still below the pre-Covid 2015-2019 average of 110%, signalling that there is upside to its diesel production, it said.

However, the overall upside to India’s diesel exports is limited by the month-long maintenance of Rosneft-owned Nayara Energy’s 1.67 million mt/month refinery in November, when the entire plant will be shut down.
Source: Livemint