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India’s diesel exports loading for Europe hit a record high in September amid open arbitrage for westbound shipments, Reuters reported on Wednesday, citing tanker-tracking data and analysts.
Last month, diesel cargoes loading from India and bound for Europe averaged between 280,000 barrels per day (bpd) and 303,000 bpd – or roughly half of all Indian diesel shipments in September, according to vessel-tracking data by LSEG, Vortexa, and Kpler cited by Reuters.
At the same time, Indian diesel shipments eastwards to Singapore slumped in September.
The east-west arbitrage on diesel futures in Europe and in Asia jumped last month, which incentivized traders to ship more of the India-produced fuel to Europe, analysts told Reuters.
But the differentials have narrowed in the past week, which means that India’s diesel shipments to Europe are unlikely to repeat in October the highs from September, they added.
The high Indian exports of diesel to Europe last month could help Europe stock on fuel supplies ahead of the winter, on one hand, and potentially ease the downward pressure on refining margins in Asia, on the other hand, according to the traders and analysts who have spoken to Reuters.
The higher shipments in September may have also been the result of the temporary Russian ban on diesel exports to most markets, including Turkey, Serena Huang, Vortexa’s head of APAC analysis, told Reuters.
At the end of last week, Russia lifted the ban on most of its diesel exports, two weeks after announcing export restrictions on diesel and gasoline to curb soaring domestic prices.
The ban on diesel and gasoline exports, enforced on September 21, affected Russia’s diesel exports which have been diverted away from the EU after the embargo kicked in in February. Russia is now shipping diesel to Turkey, the Middle East, North and West Africa, and Brazil in South America.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com