Industry Odisha Bureau, Oct 30: A global supply crunch and record refinery runs lift India’s shipments. Home demand may cap further gains.
India’s diesel exports climbed to a 12-month high in October as global supplies tightened. Shipments averaged 700,000 barrels per day, up from 620,000 in September, Kpler data showed. That is a rise of about 12.9% in the daily export rate. Total October exports came to roughly 2.90 million tonnes, the highest since September 2025.
A deep global diesel shortage is behind the surge. The International Energy Agency blamed continued disruption to Middle East exports. Lower supply from Russia and parts of Asia added to the strain. Global diesel and gasoil availability fell 1.5 million b/d year-on-year in Q2 2026. The shortfall widened to 1.7 million b/d in the third quarter.
An October Dallas Fed commentary estimated up to 10% of global refining capacity was affected. That is roughly 8 million b/d. It cited the Strait of Hormuz closure and Houthi attacks on Red Sea shipping. Damaged Middle East refineries and Ukrainian drone strikes on Russian plants also weighed. Export curbs in China and Russia tightened markets further. Disrupted capacity, however, is not the same as permanently lost capacity.
Indian refiners were well placed to fill the gap. Plants ran above 100% utilisation, helped by little scheduled maintenance this year. Utilisation is measured against nameplate capacity, so running above 100% is possible. It means throughput is exceeding rated capacity, not physical limits. Kpler’s lead refining and modelling analyst Sumit Ritolia said this helped maximise throughput. Large export-focused refineries have also tilted their yields towards diesel.
Strong diesel cracks have sweetened the economics. A crack spread is the gap between diesel prices and crude costs. Ritolia said elevated cracks make exports highly profitable. Access to competitively priced crude, including Russian barrels, adds further support. Still, cracks are not net profit. Freight, insurance, energy and operating costs all shape what refiners actually earn.
Scale and export terminals give India’s mega refineries wide reach. Ritolia told BusinessLine they can easily supply Asia, Africa, Europe and even the US. That flexibility lets refiners steer cargoes to wherever demand and prices are strongest.
Ritolia expects exports to stay strong in the coming months. He sees refinery runs holding around 5.6-5.7 million b/d, with no major maintenance planned. Domestic demand, however, could cap further gains. Festive buying, freight movement and farm activity should keep local diesel use firm. Stable retail prices are expected to support consumption too. He said this should absorb part of the additional output. He sees October as this year’s export peak.
The global diesel shortage has handed Indian refiners a clear commercial opening. But it may not last if supply recovers or margins narrow. Sustaining high exports depends on steady throughput and competitive crude costs. It also depends on enough surplus diesel once domestic demand is met.
