UNDER THE PUMP

India's 2025 fuel exports could feel the heat of geopolitics, Houthi attacks, growing US supplies, and new refineries

- S DINAKAR

Conflicts in West Asia and new refineries in Africa and West Asia may take the shine off India's overseas fuel sales in 2025, a key contributor to the country's exports, industry officials say and shipping data show. Overseas sales of gasoline, naphtha, diesel, and jet fuel rose marginally by 2.9 per cent on the year in 2024 to a record, ship tracking data show.

Attacks by Iran-backed Houthi rebels since October 2023 on ships crossing the Suez Canal, the shortest passageway for Indian diesel and gasoline shipments to enter western markets, have hurt sales of transport fuel shipments from India, with Europe and Americas-bound tankers taking a circuitous route around Africa. It is unclear if the Suez will be completely free for transportation this year because the Houthis have threatened to expand the conflict to other West Asian nations.

Reliance Industries is India's biggest fuel exporter, with seven out of every 10 barrels shipped from India supplied by the company's Jamnagar refinery in Gujarat.

State-run refiners mainly serve the Indian market and are marginal players overseas. Reliance declined comments.

Venezuela, Russia factor

What is also key to keeping Indian fuels competitive in export markets is the continuing availability of discounted fuels from Venezuela and Russia. The discounts, off European benchmark crude Brent, was as high as $20 per barrel in early 2024 for dirty, Venezuelan Merey grades, and around $3-$5 a bbl last year for Russian Urals grade, a much higher-quality, lower-sulphur oil, according to refining sources and customs data.

Indian private sector refiners Reliance and Nayara Energy accounted for 36 per cent of India's Russian crude purchases last year. But Venezuelan supplies to India have dried up because of US sanctions - last year, Reliance, India's main buyer of Venezuelan Merey, imported just 59,000 bpd, a fraction of its previous purchases.