India to keep up diesel exports as US ban prospect roils market

According to fresh market updates, India, the world’s second-largest exporter of seaborne diesel this year, has no plans to follow suit if the US imposes a ban on overseas sales to ease a price spike at the pump.

“We honor our commitments,” Oil Minister Hardeep Puri stated of diesel export contracts at an event in New Delhi. He emphasized the country’s fuel industry is well positioned to weather the market turmoil as refining has expanded over recent years, with ongoing investments to enhance capacity.

India has overtaken Russia so far this year as the top supplier after the US, accounting for around 10% of global diesel shipments, according to Kpler data. That makes the country an increasingly important source of the fuel as disruptions elsewhere tighten the global market.

Diesel prices outside the US surged relative to American futures on Thursday as the prospect of the Trump administration restricting exports rattled markets. The European Union has expressed concern around potential US curbs, which could further squeeze supplies already constrained by widespread disruptions.

Puri pointed to Indian Oil Corp.’s recent five-year agreement to supply fuel products to Mauritius, saying reneging on such commitments would undermine buyers’ trust in Indian suppliers.

India, the world’s third-largest oil consumer, has around 5.4 million barrels a day of refining capacity and imports roughly 90% of the crude it processes. Its large refining system and growing domestic capacity allow it to export more than 1 million barrels a day of fuels.

India will continue investing in refining even as plants shut in parts of Europe, Puri stated, positioning the country to meet rising domestic demand while remaining a major supplier to global markets.

Crude suppliers including Saudi Aramco and Abu Dhabi National Oil Co. are additionally interested in investing in Indian refining projects and are in discussions, according to Puri.

“They want to come in,” Puri stated. “Nobody wants to come and invest in refinery unless they additionally get a slice of your growing downstream market.”