Europe banned most oil shipments from Russia almost a year ago, but it consumes diesel that may have been made from Russian oil.
The region’s imports of diesel from India, one of the biggest buyers of Russian crude, are on track to soar to 305,000 barrels a day, the most since at least January 2017, data from market intelligence firm Kpler shows.
Although it is not possible to say for sure that the molecules originated in Russia — India also processes oil from elsewhere — the deliveries from Moscow have given Indian refineries the ability to produce abundant diesel and boost exports.
Arrivals in Europe in November include a rare shipment from Mumbai-based Nayara Energy Ltd., which has imported nearly 60% of its crude from Russia this year, according to Kpler. Reliance Industries Ltd., Europe’s main supplier of Indian diesel, draws more than a third of its oil from Russia, the figures show.
The increase in diesel imports from India also illustrates a fundamental shift in oil trade after the Kremlin’s war in Ukraine. A year ago, Russia was Europe’s main supplier of diesel, a fuel essential for the industrial and transport sectors. The European Union banned most seaborne imports of Russian oil in December and petroleum products in February.
In response, Europe and Britain sought diesel supplies from other markets. India is helping to fill a supply shortfall as European imports from the US, Turkey and Saudi Arabia slide in November. Saudi diesel arrivals will fall to around 94,000 barrels per day, the lowest since February 2020.
The “availability of Saudi barrels fell sharply in October and November due to planned local refinery maintenance, increasing interest for Indian diesel,” said Eugene Lindell, head of refined products at industry consultant Facts Global Energy.
Competitive Edge
As the West shuns Russian oil, Moscow has found increased appetite for its oil in Asia. Indian refiners could buy Russian crude at a discount and sell the processed oil in markets, such as Europe, where diesel is in high demand.
“The 1.6-1.8 million barrels per day of Russian oil that Indian refiners are buying creates a competitive advantage that others don’t have,” according to Viktor Katona, chief analyst at Kpler.
The share of Indian diesel flows to Asia now accounts for about 19% of the country’s total exports of the fuel, compared with 33% last year, he said. A large part of that volume was diverted to Europe. Overall, Europe’s imports of diesel and gasoline this month will rise to 935,000 barrels a day, a 5% increase from October, Kpler data show.
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Updated: 27 Nov 2023, 22:00 IST
(tagsTo Translate)Europe