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| Cargo trains carrying fuel and oil near Nizhny Novgorod, Russia. (Source: Bloomberg) |
According to Bloomberg , European diesel imports from India - one of the biggest customers for Russian crude - are on track to surge to 305,000 barrels per day, the highest level since January 2017, according to market intelligence firm Kpler.
In September 2023, diesel shipments from India to Europe averaged between 280,000 barrels per day and 303,000 barrels per day, accounting for nearly half of New Delhi's total diesel exports for the month.
According to calculations by Russia's RIA Novosti news agency, the European Union (EU) imported 7.9 million tons of refined petroleum products from India in the first 9 months of 2023. This figure is 2.5 times higher than the same period last year and more than 3 times higher than in 2021.
It cannot be said for sure that India's diesel comes from Russia. However, this Russian commodity has helped refineries in the South Asian country produce abundant diesel and boost exports.
Diesel shipments from India to Europe this November included one from Mumbai-based Nayara Energy Ltd., which has imported nearly 60% of its crude from Russia this year, data from Kpler shows.
Reliance Industries Ltd. — India's top diesel supplier to Europe — also gets more than a third of its crude from Russia.
Besides, Russian crude oil also continues to penetrate the European market in other ways.
According to data from the Center for Research on Energy and Clean Air (CREA), Bulgaria's Neftochim Burgas refinery on the Black Sea imported more than 4.95 million tonnes of Russian crude oil in the first 10 months of this year.
Bulgaria is exempted from the EU embargo on Russian oil to ensure adequate domestic supplies. However, Russian oil is being refined and sold to other European markets.
CREA reported that Bulgaria is the fourth largest importer of Russian crude oil by sea, after India, China and Türkiye.
The surge in diesel imports from India also demonstrates a fundamental shift in Europe's oil trade after Russia's special military campaign in Ukraine began.
A year ago, Moscow was Europe's top supplier of diesel. Before the special operations, half of the continent's diesel came from Russia. It is a vital fuel for industry and transport.
The EU has banned most seaborne imports of Russian crude oil in December 2022 and petroleum products in February 2023.
To comply with the ban, the EU and the UK have sought diesel supplies from other markets, with India helping to fill the gap as exports to Europe from the US, Turkey and Saudi Arabia fell in November.
Diesel imports from Saudi Arabia are expected to fall to around 94,000 barrels per day, the lowest since February 2020.
Saudi Arabia’s available oil supply fell sharply in October and November due to planned maintenance at its refineries, boosting demand for Indian diesel from the 27-member bloc and Britain, said Eugene Lindell, head of refining at industry consultancy Facts Global Energy.
As the West shuns Russian oil, Moscow is also ramping up sales of the commodity in Asia. Indian refiners can buy Russian crude at a discount and sell the refined oil in Europe, where diesel demand is high.
“Russia’s 1.6-1.8 million barrels per day of crude oil has given Indian refiners a competitive edge that other countries do not have,” said Viktor Katona, chief crude oil analyst at Kpler.
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