India’s petroleum product exports hit 15-month low in January

The United Arab Emirates, Netherlands, and Malaysia were among the top buyers of Indian petroleum products in January including diesel, jet fuel, gasoline, and naphtha among others.

India’s export of petroleum products experienced a significant decline in January, reaching its lowest levels in 15 months. The country’s exports, including diesel, jet fuel, gasoline, and naphtha, were adversely impacted by various factors, contributing to the lowest export volumes since October 2022. The top buyers of Indian petroleum products in January included the United Arab Emirates, Netherlands, and Malaysia.

The prolonged disruption in the Suez Canal due to congestion and geopolitical tensions affected India’s export routes. Many tankers opted for the longer route via the Cape of Good Hope, resulting in higher shipping costs. Shipping from India to Europe was particularly impacted, with the longer route causing delays and increased expenses.

Notably, the United Arab Emirates imported 103,690 barrels per day (bpd) of refined fuels from India in January, while the Netherlands imported 75,411 bpd, and Malaysia imported 64,098 bpd.

Viktor Katona, lead crude analyst at Kpler, highlighted the impact of the longer shipping route, stating, “The route from Jamnagar to Rotterdam takes 24 days via the Suez Canal and 42 days via the Cape of Good Hope.” The shift in shipping routes has led to a significant increase in shipping costs, with a reported surge of 60-70%.

India’s exports to Europe faced a considerable drop, decreasing to just 100,000 bpd from 350,000-400,000 bpd in November and December. The disruption in the Suez Canal, coupled with increased shipping costs, has led to challenges in maintaining export volumes.

The situation poses a threat not only to India’s export volumes of petroleum products but also impacts the country’s domestic consumption. India’s domestic consumption is projected to register a modest 3% growth in the fiscal year beginning April 1. The demand for petroleum products, including jet fuel, diesel, and LPG, is expected to grow to 239 million tonnes in the financial year 2024-25, marking the lowest growth rate since FY22.

The decline in export volumes, coupled with challenges in the domestic market, underscores the complex dynamics influencing India’s petroleum industry. As geopolitical and shipping challenges persist, stakeholders in the sector are closely monitoring developments to navigate the evolving landscape.