How India Became Europe's Diesel Lifeline Amidst Global Supply Challenges

India's Rising Role in Diesel Supply

New Delhi: India has positioned itself as a vital supplier of diesel to Europe, accounting for approximately 60% of the fuel that passed through the Bab-el-Mandeb Strait to the continent in August. This shift comes as Russian diesel exports face significant limitations and US shipments show signs of decline, according to insights from Vortexa, a provider of real-time energy and freight analytics.

In August, around 200,000 barrels per day of diesel (gasoil) were transported through the Bab-el-Mandeb, nearly matching levels from the previous year after a sharp decline in March and April. Indian refineries have become increasingly essential for meeting Europe’s diesel needs, supplying about 60% of this volume, as reported by Vortexa.

As the fourth-largest refiner globally, India boasts a refining capacity of 258.1 million tonnes per year, significantly surpassing its domestic fuel requirements.

During the fiscal year 2025-26, India exported 61.5 million tonnes of petroleum products, solidifying its status as one of the leading exporters of refined fuels worldwide. These products are now finding a market in both Europe and Russia.

However, concerns arise regarding the sustainability of this supply. Crude and condensate imports into India dropped for the second month in a row, averaging about 3.8 million barrels per day in August, down from 4.8 million barrels per day a year prior, according to Vortexa data.

Russian diesel exports, which were once a key component of European supply, have largely diminished. In the first 25 days of August, Russia's seaborne diesel and gasoil exports averaged only about 150,000 barrels per day, a decrease of approximately 610,000 barrels per day from the previous year and 81% below the five-year seasonal average, as per Vortexa.

Even with a potential easing of Russia's diesel export ban starting September 1, a swift recovery seems unlikely. Ongoing Ukrainian drone strikes have continued to disrupt Russian refining and export capabilities, with 32 attacks on refineries reported in July and August. One such strike on the 260,000-barrel-per-day Perm refinery left only about 28% of its crude distillation capacity operational, according to Vortexa's findings.

The repercussions extend to export terminals as well. The Black Sea, which accounted for about 44% (or 380,000 barrels per day) of Russia's diesel and gasoil exports last year, has seen reduced volumes due to port and refinery disruptions. No diesel shipments have left Tuapse since a May strike, as reported by Vortexa.

In response to domestic refining challenges, Russia has increasingly turned to imports. Its seaborne gasoline imports surged to a record approximately 125,000 barrels per day in August, equating to about 470,000 tonnes for the month. Notably, around 55% of these imports were transported on sanctioned vessels, with India, Turkey, and Morocco among the suppliers.

In August, Indian gasoline shipments to Russia were carried on sanctioned fleets and involved ship-to-ship transfers in the Mediterranean, illustrating how sanctions, refinery outages, and disruptions to traditional trade routes are reshaping the flow of refined products in the region.

For Europe, India's contribution is particularly significant in the diesel sector. The country is helping to fill the void left by Russia at a time when the US, another major supplier, is also showing signs of retreat.

In August, the US provided about half of Europe's seaborne diesel imports from outside the region, totaling around 520,000 barrels per day, compared to roughly a quarter a year earlier. However, shipments peaked at nearly 540,000 barrels per day in the first half of August before dropping to about 350,000 barrels per day in the latter half, marking a decline of approximately 35%.

This situation leaves Europe increasingly reliant on Indian refiners to sustain eastern supply routes, especially as crude availability in India tightens.

The Strait of Hormuz is offering limited relief to the clean-products market, with only 37 crossings by MR2-sized or larger tankers carrying clean products recorded in the first 27 days of August, down from 55 in July and 69 in June.

While ship-to-ship transfers offshore Oman continue, most of the activity involves crude rather than refined products. Approximately 230,000 barrels per day of clean products originating west of Hormuz were transferred via ship-to-ship operations offshore Oman in the first three weeks of August, a decrease from about 400,000 barrels per day during the same period in June.

Consequently, the European diesel supply chain is becoming increasingly concentrated.

Despite the scheduled end of the current diesel ban, Russian exports remain low, US shipments are declining, and the Hormuz route is providing minimal additional supply. As a result, India is shouldering a growing share of the responsibility, according to Vortexa.

With Europe approaching its peak winter diesel demand period and inventories already low, refineries on both sides of the Atlantic are facing autumn maintenance after operating at high rates.