US weighs diesel export ban: India ramps up shipments as Russia supply falters. Can it sustain this?
The US is weighing a 90-day ban on diesel exports amid pressure to lower fuel prices, while India continues to boost overseas shipments. Here's why Indian diesel exports are rising, who is buying the fuel and whether India can sustain high export volumes as global supplies remain tight.
The US is deliberating a 90-day ban on diesel exports amid pressure to reduce fuel prices ahead of the November midterm elections, according to Politico. This move has created divisions within the administration and sparked opposition from the US fuel industry, which cautioned that restricting exports could only provide a temporary respite as it tightens supplies and raises prices over time, the report added.
Meanwhile, India has not indicated any plans to limit diesel exports, even as global fuel markets face tight supplies. "We honor our commitments," stated Oil Minister Hardeep Puri while referring to existing diesel export contracts, according to Bloomberg.
India has become a major player in the global diesel market, holding the second position as the world's largest exporter of seaborne diesel, according to Kpler data cited by Bloomberg. India currently accounts for approximately 10% of global diesel shipments so far in 2023. The surge in India's exports has been driven by its abundant refining capacity, its ability to redirect fuel towards markets with better margins, and strong diesel margins.
India's export destinations have adapted to regional shortages and price signals. In July, India planned to ship 2.8 million barrels of diesel to Brazil, marking an 11-month high, reported Reuters. India also boosted exports to Africa, Southeast Asia, and Turkey, with Turkey's imports from India reaching a record high of more than 120,000 barrels per day in August 2023, according to Kpler shipping data.
Despite India's growing role in the global diesel market, sustaining high export volumes could prove challenging in the long run. Global diesel markets remain under pressure due to disruptions in Russia and the wider West Asia crisis. While India possesses the refining capacity to remain a significant supplier, maintaining exceptionally high export volumes depends on factors such as crude availability, refinery capacity, shipping economics, and regional price spreads.
Written by urgent.news from Live Mint's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
