India is exporting more diesel on the east of Suez route into Southeast Asia in May, with shipments to the region on track for a four-year high, Reuters reported on Friday, quoting vessel-tracking data and trade sources.
India is estimated to have shipped 600,000 metric tons, or 4.47 million barrels in total, to Southeast Asia in May, according to data from tanker-tracking services Vortexa, LSEG, and Kpler.
This is the highest such volume since 2021, as higher margins and lower shipping costs support more volumes heading east of India instead of to the European market.
India’s diesel exports to Europe, on the other hand, are estimated at about 500,000 metric tons this month, per data compiled by LSEG.
The higher exports from India to Asia – mostly to Singapore and Malaysia – are pressuring refining margins and spot premiums for diesel in the Asian markets.
But lower Indian diesel supply to Europe is raising the price of June ICE gasoil futures and boosting the margins in Europe.
Indian diesel exporters are currently benefiting from lower shipping costs east of Suez, while the cost of chartering a tanker on the India-Northwest Europe route has jumped in recent days, according to data compiled by Reuters.
In June, India’s diesel exports are set to rise further as the coming monsoon season is expected to reduce domestic demand, analysts and traders say.
Indian crude oil imports jumped in March and April, with volumes from Russia, the top crude supplier, recovering after the initial chaos in trade following the U.S. sanctions on Russian tankers in January.
India is on track to import nearly 1.8 million barrels per day (bpd) of crude oil from Russia in May, which would be a 10-month high, according to vessel-tracking data by Kpler.
This month, the drop in international oil prices and the discount on Russia’s crude grades ensured the availability of more non-sanctioned tankers to move Russian oil without violating Western sanctions, according to trade sources.
By Tsvetana Paraskova for Oilprice.com
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