On Thursday, October 2, Data from ship trackers and trade sources stated that India’s diesel exports to Europe likely hit a record high in September as traders cashed in on strong profits in the West during a refinery maintenance season. Moreover, data from London Stock Exchange Group (LSEG) , Kpler, and two trade sources showed that September volumes from Asia’s key swing supplier bound for Europe were at 1.3 million to 1.4 million metric tons.
Shiptracking data illustrated India’s exports to Europe reached these levels for the first time since such figures began to be recorded in 2017. India’s refiners, which source around a third of their crude from Russia, are enhancing runs and redirecting surplus products abroad, with gasoline and diesel shipments hitting multi-year highs. Notably, diesel exports for September were also at five-year highs of around 3 million tons.
What has the LSEG data shown about Diesel exports?
London Stock Exchange Group (LSEG) pricing data showed that the diesel east-west spreads averaged $45 per metric ton in September, an increase from less than $30 in August, driving traders to move the product to Europe. The traders said that European prices have boosted as refinery maintenance has declined, and diesel supply has been affected there. In Europe, crude processing capacity of some 550,000 barrels per day to 600,000 bpd is predicted to be offline in October, two of the sources said, an increase from around 400,000 bpd in September. Shipping costs have also dropped by around $10 per ton. The cost to ship 90,000 tons of refined fuel on the India-Europe route fell to $3.25 million to $3.5 million in the second half of September from $4 million to $4.2 million in the period from the end of August to early September.
However, an analysis of Vortexa’s head of APAC, Ivan Mathews, expected that India’s transport fuel exports to drop month on month in October due to higher domestic demand during the Diwali festive season. He added that this expected decline in exports could be limited as product cracks are higher than the same period last year, which could propel export-oriented refiners in India to run harder on the margin and encourage some export sales. Traders remained cautious on diesel export volumes on the India-Europe trade route, given a lack of details about the European Union’s 18th sanction package. These new rules ban fuels made from Russian oil, but it’s not clear yet how this will affect diesel that India exports.