In a surprising turn of events, India has emerged as Europe’s largest supplier of refined fuel, surpassing long-time oil giant Saudi Arabia. According to data from global trade intelligence firm Kpler, European imports of refined oil from India are now expected to exceed 360,000 barrels per day. This shift comes as Western sanctions on Russian oil have reshaped the global energy landscape, allowing India—a BRICS member and major importer of Russian crude—to step into the void left by the absence of Russian supplies.
From 154,000 To Over 360,000 Barrels – India’s Fuel Exports Surge
Before the Russia-Ukraine conflict, Europe imported about 154,000 barrels per day from Indian refineries. Following the European Union’s ban on Russian oil, which took effect on February 5, that figure quickly escalated to 200,000 barrels per day, and it continues to grow. With Europe’s reliance on Russian oil disrupted, India’s role as a refined fuel supplier has expanded significantly. Reuters first reported that European countries have increasingly looked to Indian refiners to secure stable fuel imports amid ongoing market disruptions and volatility.
US Sanctions on Russia: The Catalyst Behind India’s Fuel Boom
India’s rise as a refined fuel powerhouse for Europe is due, in part, to US sanctions on Russia. With strict restrictions imposed on Russian oil following the Ukraine invasion, India has managed to purchase discounted Russian crude, fueling its own refineries at a fraction of the market price. Since 2022, India has saved nearly $7 billion by buying Russian oil at these reduced rates. Importantly, a large portion of these transactions are settled in local currencies rather than in US dollars, further enhancing cost savings for India.
As a result, India’s Russian oil imports are projected to hit over 2 million barrels daily by April 2025, constituting nearly 44% of the country’s total oil imports. By accessing cheaper Russian oil, India has positioned itself to refine and export fuel at competitive rates, making it an attractive supplier for Europe amid sanctions against Russia.
Saudi Arabia’s Response: A New Push in Oil Production and Modernization
Despite losing its position as Europe’s top refined fuel provider, Saudi Arabia isn’t standing idle. OPEC+, led by Saudi Arabia, plans to boost oil production beginning in December, adding 180,000 barrels daily, with additional production increases expected through 2025. This marks a reversal of current production cuts, reflecting Saudi Arabia’s ambition to secure its role in the global oil market even as demand growth remains uncertain.
Moreover, Saudi Arabia’s national shipping company, Bahri, inked a $1 billion deal this summer with Greece-based Capital Maritime and Trading Corporation (CMTC) to acquire nine Very Large Crude Carriers (VLCCs). This deal will modernize Bahri’s fleet, enhancing its ability to transport oil efficiently across the globe and positioning Saudi Arabia to compete in the refined fuel export market with India.
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What’s Next for Europe’s Energy Supply?
India’s emergence as Europe’s top supplier of refined fuel could have long-term effects on the geopolitical landscape of energy. While Saudi Arabia is working to increase its production capabilities and modernize its oil transport infrastructure, India’s competitive edge—driven by affordable Russian oil—continues to attract European buyers. With global energy dynamics constantly shifting, Europe’s reliance on India’s fuel exports might become a fixture, reshaping traditional energy alliances.
India’s rise underscores how sanctions and regional conflicts can lead to unexpected shifts in global markets. As Saudi Arabia prepares to rebound, Europe’s search for reliable and affordable fuel suppliers might solidify India’s status as a new powerhouse in the refined fuel industry.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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