India’s exports of refined oil products that have started to stabilize last month after a drastic decline in the beginning of 2024 have once again witnessed a downfall in March on the back of weakening export margins, as per latest ship-tracking data.
The country exported a total of 1.28 million barrels per day of refined oil products in March, down 12.5% from the previous month, data from intelligence firm Vortexa showed. The exports were down by 15% on year.
“India’s diesel exports have seen the largest month-on-month decline in March, which could be a result of weakening export margins,” said Serena Huang, analyst at Vortexa.
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Moreover, ample supplies from the US and Middle East to Asia and Europe resulted in weaker demand for these products from India. The inclination of European countries towards US and the Middle East for purchases can be attributed to the fact that voyages from India are opting for the longer route around Africa to reach Europe due to the Red Sea crisis which has also resulted in increased freight costs.
India exported 304,427 barrels per day of refined oil products to Europe in March, down by 6.5% from February. Exports to Asia also dropped 22% to 308,740 barrels per day during the month.
Asia accounted for 24.2% of the total exports, largest among all continents followed by Europe and Africa with a share of 23.8% and 23.3% respectively.
“Ample supplies in Europe (from the US and Middle East) as well as in Asia, are eroding arbitrage to these markets,” Huang further noted.
Even as the exports to Europe have moderated from the earlier low levels amid tensions at the Red Sea, the volume is still short of the 350,000-400,000 barrel a day average India supplied to Europe in November and December.
India exports a variety of goods via the Red Sea including petroleum products. The country’s export of petroleum products grew by 5.1% in February to $8.24 billion compared to $7.84 billion in February 2023, as per the latest government data.
Even though India’s petroleum products exports may be marginally outpacing the overall outward shipments, imports of these items are rising at a faster rate. As a result, the country’s self-sufficiency in oil products has been witnessing a decline from 14.5% in 2011-12 to 12.6% in 2022-23, and further to 12.3% in April-February this fiscal, according to recent data from the government’s Petroleum Planning and Analysis Cell.
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The country imported 43.8 million tonnes of petroleum products in Apr-Feb period, up 9% from the year last year. The imports were valued at $21.2 billion.
Not just India faces a threat in its export volumes of petroleum products, but the country’s own domestic consumption is seen registering a modest 3% growth in the financial year beginning April 1, an analysis published by the Petroleum Planning and Analysis Cell showed. The growth will be lowest since FY22.
The country’s demand for petroleum products including jet fuel, diesel, LPG among others is likely to grow to 239 million tonnes in the financial year 2024-25. The country’s consumption of petroleum products stood at 233 million tonnes last year, the data showed. Come from Sports betting site VPbet
