India's refined product exports are on track to reach 1.55 million barrels per day (bpd) in July, the second-highest level in Kpler records dating back to 2017, helping to alleviate Asia's fuel crisis as refinery outages and geopolitical tensions constrain supply, according to Reuters columnist Clyde Russell.
Supply Side: India's Export Surge
India's exports of light and middle distillates in July nearly double the 866,000 bpd recorded in May, which was the lowest in nearly four years. The sharp increase comes after India's crude imports hit a 21-month low of 4.55 million bpd in April, crimping refinery runs. However, after the Trump administration waived sanctions on Russian crude, India swung to buying Russian oil, with imports from Russia reaching 2.73 million bpd in June and an estimated 2.57 million bpd in July—the two strongest months on record, surpassing the previous high of 2.16 million bpd in May 2023, Kpler data show.
Refiners are not acting out of altruism; they are capitalizing on the large premium that fuels like diesel and gasoline command over crude oil, Russell noted.
Price Premiums Driving Refining Margins
The surge in exports is underpinned by extraordinary product premiums. Benchmark Brent crude futures closed at $94.07 a barrel on Wednesday (July 22), up 34% from the post-deal low of $70.14 on July 2 and 30% higher than the pre-conflict close of $72.48 on February 27, following the breakdown of the ceasefire between the US and Iran. Regional benchmarks for refined products have risen even more sharply:
| Product | Price (July 22) | Change from post-deal low | Change from pre-conflict (Feb 27) |
|---|---|---|---|
| Singapore gasoil | $156.72/bbl | +43% from $109.62 (June 26) | +71% from $91.42 |
| Singapore gasoline | $119.70/bbl | +27% from $94.00 (July 9) | +51% from $79.30 |
These margins incentivize every available barrel of refining capacity, not just in India.
Other Exporters Ramp Up
Oman, which ships from ports outside the Strait of Hormuz, is expected to export 783,200 bpd of light and middle distillates in July—an all-time high, up from the prior record of 712,600 bpd in June, according to Kpler. Taiwan is forecast to export 306,000 bpd in July, the most since December and nearly three times the 124,000 bpd shipped in April, which was the lowest in five years.
Demand Side: Asia's Imports Still Below Pre-Conflict Levels
Despite these efforts, Asia's imports of light and middle distillates are estimated at 5.80 million bpd in July, up from 5.19 million in June—the lowest in Kpler records since 2017—but still 18% below the average of 7.05 million bpd in the three months leading up to the US-Israeli war on Iran and the effective closure of the Strait of Hormuz.
This indicates that Asia's refined products markets remain tight. Even with sufficient crude supply, export capacity has not fully compensated for the loss of output from West Asian and Russian refineries affected by conflicts, Russell concluded.
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