India's diesel shipments to Europe slip 20% as US, Gulf supplies rise
India's diesel exports to Europe fell by a fifth sequentially in April as rising competition from US and Gulf suppliers amid softening demand in the continent weakened margins on the fuel.
Diesel exports to Europe declined to 210,000 barrels per day (bpd) in April from 262,000 bpd in March, according to energy cargo tracker Vortexa.
Europe consumes more than 40% of India's diesel exports. India's overall diesel exports fell 9% to 517,000 bpd in April from 567,000 bpd in March. Exports to Asia, however, rose 33% to 69,000 bpd in April from 52,000 bpd in March.
«Healthy exports from the Middle East and the US to Europe, higher freight costs due to the rerouting via Cape of Good Hope, as well as demand weakness in Europe will likely continue to limit India's diesel exports to Europe,» said Serena Huang, analyst at energy cargo tracker Vortexa.
«Meanwhile, there are ample supplies of diesel in Asia, although refinery maintenance this quarter is expected to see lower exports from Northeast Asia, which should provide some opportunities for Indian refiners to move their cargoes East.»
Indian refiners serve several countries, shipping diesel cargoes to markets that offer comparatively higher effective margins. These days tankers carrying Indian diesel mostly take the longer route to Europe via Cape of Good Hope to avoid potential attacks by Houthi rebels in the Red Sea. This inflates transportation cost and time besides lowering the competitiveness of Indian cargoes in the European market.
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