Russian crude, ethanol blending, and the winter demand in Europe drive refiners in India to increase gasoline and diesel exports to multi-year highs.
Due to increased capacity for processing crude, decreased local demand, and a rapid increase in ethanol blending that has freed up fuel for foreign markets, Indian oil refiners are exporting more gasoline and diesel than they have in years, traders and experts told Reuters.
Nearly a third of India’s oil comes from Russia, where refiners have been able to get cheaper barrels since Western sanctions on Moscow. India is the world’s second-largest importer of petroleum after China. With Europe emerging as the largest benefit ahead of the winter heating season, the oversupply has given refiners the advantage to shift exports overseas.
India defends itself against US criticism
Washington has charged New Delhi with profiteering by marketing refined fuels at higher international prices while purchasing Russian crude at a discount. India has retaliated, claiming that after Moscow’s 2022 invasion of Ukraine, its purchases have stabilized erratic international markets.
Record-breaking gasoline exports
The consulting firm Wood Mackenzie predicts that this year, India’s oil processing would grow by 130,000 to 160,000 barrels per day (bpd), reaching 5.51 million bpd.
Data firm Kpler estimates that gasoline exports will reach a record of almost 400,000 barrels per day in 2025, with the majority of those shipments going to Asia.
“A growing percentage of ethanol blending in domestic gasoline use is supporting the rise in gasoline exports,” Priti Mehta, an analyst at Wood Mackenzie, told Reuters. India raised its ethanol mix from 12 percent the previous year to 20 percent in 2025.
Exports are also increasing since the monsoon season has reduced local demand and fewer refinery maintenance shutdowns have kept capacity open, an industry source told Reuters.
Europe is the destination for diesel exports
Analysts predict that India’s exports of gasoil, or diesel, will reach a four-year high in 2025. The majority of volumes are going to Europe, where extensive refinery maintenance in the Middle East and Europe might result in supply shortages in the fourth quarter.
Kpler estimates diesel exports to be closer to 560,000 barrels per day, while Wood Mackenzie predicts 610,000 to 630,000 barrels per day.
Reduced Saudi supply contributes to India’s opening
India’s export drive coincides with a drop in Saudi Arabia’s sales of refined products of around 300,000 barrels per day in October and November, according to consultancy Energy Aspects. The planned repair of many Aramco facilities will allow Indian refiners to increase their presence.
The change in European sanctions may increase demand
In July, the European Union enacted its 18th round of sanctions, which included a proposal to ban the import of petroleum products derived from Russian oil. The union would only accept refined supplies from allies including the United States, Canada, Switzerland, Britain, and Norway after a six-month transition period, further solidifying India’s position as a vital supplier to Europe.