India's Fuel Exports Surge Amid Russian Crude Trade Dynamics

Key Highlights

• Refining Advantage: Indian refiners export significant volumes of fuel to the US, leveraging cost-effective Russian crude.
• Geopolitical Impact: Sanctions on Russian crude have reshaped global trade flows, but indirect sales through India persist.
• Regulatory Risks: Potential US and EU actions could tighten scrutiny on Russian-origin fuel exports.
• Market Outlook: Crude price volatility and global refining capacity constraints will influence future trade patterns.

Petroleum Price Trends: Key Market Rates Across Locations

• Refinery Bitumen (VG30) is priced at ₹47,262 per metric ton in Panipat, while Roadgrip Bitumen Emulsion (RS 1) stands at ₹33,810 per metric ton in Mathura. 
• In Delhi, Base Oil (N150) is available at ₹67.5 per liter, and Lubriedge Rubber Process Oil (Paraffinic 245) is priced at ₹72 per liter. 
• Fuel Oil (Virgin 180cST Furnace Oil) in Mundra costs ₹48.5 per kg. 
• In Bhiwadi, Hydraulic Oil (68) is ₹87 per liter, Gear Oil (150) is ₹115 per liter, and Rust Preventive Oil (Water Displacing Type) is the highest priced at ₹122 per liter.

Global Supply & Trade Shifts: Sanctions Reshape Fuel Markets

• The global fuel market has been shaped by shifting trade dynamics, particularly as Western sanctions on Russian crude have led to increased refining activity in countries like India and Turkey. 
• The US, despite imposing restrictions on direct Russian crude purchases, continues to import refined products from Indian refineries, particularly from Reliance’s Jamnagar facility and Nayara Energy’s Vadinar plant.
• India’s fuel exports to the US, primarily petrol and diesel, remain robust due to a combination of stable refining margins, cost-effective Russian crude sourcing, and high energy demand in North America. With US domestic refining capacity facing constraints and global supply chains adjusting to geopolitical uncertainties, Indian refiners have played a key role in bridging the supply gap. Meanwhile, the price cap imposed by the G7, EU, and Australia has not significantly curbed Russia’s ability to sell crude to refiners in Asia, allowing Moscow to sustain its oil revenue streams indirectly through refined product sales.
• With ongoing geopolitical tensions and energy security concerns, demand for refined fuel from Indian refiners is expected to persist, although regulatory scrutiny over the origin of crude may influence future trade patterns.

Petroleum News & Policy Developments: India’s Role in Global Fuel Supply

• According to a report by the Centre for Research on Energy and Clean Air (CREA), Reliance Industries Ltd. exported approximately ₹6,850 crore (EUR 724 million) worth of fuel to the US in one year, derived from Russian crude. 
• The total US import of refined fuels from Indian and Turkish refineries processing Russian crude stood at EUR 2.8 billion, with EUR 1.3 billion estimated to originate from Russian crude sources.
• Other Indian refiners, including Nayara Energy and MRPL, also contributed to fuel exports, with Vadinar exporting EUR 184 million and New Mangalore EUR 42 million, respectively. The report further highlights that these transactions have generated an estimated USD 750 million in tax revenue for Russia, emphasizing the indirect financial flow to Moscow despite Western sanctions.
• The US continues to import refined products from third-party nations, reinforcing the complexity of enforcing strict restrictions on Russian crude circulation in the global market.

Expert Opinion: Future Trade Uncertainties

• Indian refiners are expected to maintain strong export momentum, supported by access to discounted Russian crude and high refining margins. However, potential regulatory actions from the US and EU could increase scrutiny on indirect Russian oil flows. 
• If sanctions tighten, refiners may explore diversified crude sources while balancing cost efficiencies. Crude price fluctuations and global refining capacity constraints will play a crucial role in shaping future fuel trade dynamics.