India's refiners cash in as the world runs short of diesel

India has become the diesel supplier of last resort, and Reliance's Jamnagar complex shipped more of the fuel in October than in any month for a year and a half.

Reliance Industries (NSE: RELIANCE) loaded an estimated 541,000 barrels per day (bpd) of diesel and gasoil for export in October, up from about 483,000 bpd in September and 322,000 bpd in June, according to Kpler ship-tracking figures published by The New Indian Express on October 29. That took the Mumbai-based group's diesel shipments to an 18-month high, and India's national total reached 700,000 bpd, the most since September 2025, according to Sumit Ritolia, lead refining analyst at Kpler.

Reliance's estimated diesel and gasoil exports, thousand bpd, 2026. Source: Kpler ship-tracking estimates, reported by The New Indian Express, October 29, 2026. IntelliNews

India is capturing a larger refining margin as fuel supply tightens across several major producing regions. The Iran war that began on February 28 choked Gulf product flows through the Strait of Hormuz, and the International Energy Agency estimates the region's diesel exports fell from about 1.6mn bpd before the war to roughly 400,000 bpd by August. Ukrainian drones have knocked a large share of Russia's refining capacity offline, and Beijing kept Chinese fuel exports on a tight leash in October. Jamnagar, with about 1.4mn b/d of capacity on one site, is among the few plants with barrels to spare.

Buyers across the Atlantic are paying heavily for those barrels, with ultra-low-sulphur diesel in New York Harbor averaging $5.20 a gallon in the week to October 23, or about $218 a barrel, against roughly $99 per barrel in January and February before the war. American drivers paid $6.35 a gallon at the pump on October 26, a few cents short of the year's peak of $6.53 on September 21. In Europe, France is due to release 10mn barrels of diesel from its strategic stocks on November 1 to cool record pump prices.

New York Harbor ultra-low-sulphur diesel spot price, weekly average, $ per barrel. Source: US Energy Information Administration, released October 28, 2026. IntelliNews

Russian oil helped Indian refiners through the worst of the summer, but its share of their crude slate is shrinking. After Gulf supply was disrupted they took record volumes of Russian crude in June and July. Kpler data then showed Russia's share of Indian crude imports dropping to about 35% in September from 56% in July, as Iraqi and Saudi sellers cut prices and freight on Russian cargoes soared, and state-owned refiners have swung back to Gulf crude for November.

Moscow's headline export earnings have held up regardless: Russia's seaborne crude shipments were worth $2.76bn in the week to October 25, the largest weekly sum since the 2022 invasion of Ukraine, according to Bloomberg tanker tracking, with China and India still the main buyers. That wartime high beat the previous record, set in the week to September 27, by only $10mn, and it measures the gross value of cargoes rather than tax receipts. Federal oil and gas revenue fell 17.2% y/y to RUB5.471 trillion ($67.8bn) in the first nine months of 2026.

Washington has loosened its own rules to get more fuel on the water: the Treasury's Office of Foreign Assets Control issued General License 135 on October 9, the day US President Donald Trump spoke to Russian President Vladimir Putin, authorising the sale, delivery, offloading and importation of Russian-origin diesel until April 7, 2027. The licence still bars any debit to US accounts held by Russia's central bank, its National Wealth Fund or its Finance Ministry. A week later Trump put a sweeping Russia sanctions package on hold, citing the national interest.

The White House also wants Indian refining capacity, and is looking to Jamnagar to process heavy Venezuelan crude into diesel before the November 3 midterm elections, The Economic Times reported, with Secretary of State Marco Rubio casting India as a refining superpower. New Delhi has eased its own brake on exports, cutting the diesel export duty to INR8.50 ($0.08) a litre from INR16 on October 16, after it had stood at INR25 in early September.

Russian diesel is also flowing again, but slowly and mostly to old customers. Cargoes have resumed to Turkey and Brazil, the first tankers sent towards the US have struggled to find buyers, and Moscow will keep its ban on exports by producers until the end of the year except under quotas, Kommersant reported on October 29.

Nayara Energy, the other private refiner in the Kpler figures and part-owned by Russia's Rosneft, has gone the other way, shipping about 39,000 bpd of diesel in October against 98,000 bpd in July, Kpler estimates show. Reliance's run depends on Western diesel staying near $200 a barrel, on Gulf refineries staying short and on a US licence that the Treasury can withdraw at any time, while Middle Eastern crude flows are already recovering.

This article was produced with the help of IntelliNews Lambda analytical tool