India biggest exporter of fuel to EU, courtesy Ukraine war

India’s export of fuels like diesel to the European Union jumped 58 per cent in the first three quarters of 2024, with a bulk of them likely coming from refining discounted Russian oil, according to a monthly tracker report.

The EU/G7 countries in December 2022 introduced a price cap and an embargo on the imports of Russian crude oil in a bid to cripple Kremlin’s revenue and create a vacuum in its funding for the invasion of Ukraine.

However, a lack of a policy on refined oil produced from Russian crude meant that countries not imposing sanctions could import large volumes of Russian crude, refine them into oil products and legally export them to the price-cap coalition countries.

India has become the second biggest buyer of Russian crude oil since the invasion of Ukraine, with purchases rising from less than one per cent of the total oil imported in the pre-Ukraine war period to almost 40 per cent of the country’s total oil purchases.

The rise was primarily because Russian crude oil was available at a discount to other internationally traded oil due to the price cap and the European nations shunning purchases from Moscow. Fuel exports were, however, at full price.

“Capitalising on the refining loophole, India has now become the biggest exporter of oil products to the EU. In the first three quarters of 2024, exports to the EU from the Jamnagar, Vadinar (in Gujarat) and new Mangalore refinery — which are increasingly reliant on Russian crude — saw a 58 per cent year-on-year rise further,” the Centre for Research on Energy and Clean Air (CREA) said its latest report. Europe typically imported an average of 1,54,000 barrels per day (bpd) of diesel and jet fuel from India before Russia’s invasion of Ukraine. This has almost doubled.

The CREA said: “83 per cent of the total value of Russian seaborne crude oil was transported by ‘shadow’ tankers, while tankers owned or insured in countries implementing the price cap accounted for 17 per cent of the total value of Russian crude exported in October.”