The United Arab Emirates, Netherlands, and Malaysia were among the top buyers of Indian petroleum products in January including diesel, jet fuel, gasoline, and naphtha among others.
India’s export of petroleum products fell to a 15-month low at 1.02 million barrels a day in January as the escalating tensions over the Red Sea prompted exporters to hold back shipments last month, data from data intelligence firm Kpler showed.
January export volumes were the lowest since October 2022, when the country’s export of refined oil products stood at around 887,000 barrels a day, it added.
Moreover, India’s shipments to Europe declined in January as many tankers had opted for the longer route via the Cape of Good Hope for the delivery, resulting in higher shipping costs. Africa’s Cape of Good Hope shipping route can extend voyages for up to 14 days or beyond.
“To take just one specific example, the route from Jamnagar to Rotterdam takes 24 days via the Suez Canal and 42 days via the Cape of Good Hope,” Viktor Katona, lead crude analyst at Kpler said.
The United Arab Emirates, Netherlands, and Malaysia were among the top buyers of Indian petroleum products in January including diesel, jet fuel, gasoline, and naphtha among others. While UAE imported 103,690 barrels a day of refined fuels from India last month, Netherlands imported 75,411 barrels a day. Indian exports to Malaysia stood at 64,098 barrels a day.
Even with Russian oil cargoes departing from North Sea and Black Sea ports taking the Suez Canal-Red Sea route to India and China, its major buyers, have been secured so far, India’s exports have been hit transiting the Suez Canal.
The country’s export of petroleum products to Europe had dropped to just 100,000 barrel a day from 350,000-400,000 barrel a day in November and December, Katona had said. “Many tankers have instead opted for the longer route via the Cape of Good Hope for the delivery which has resulted in increased shipping costs,” he said. The shipping cost has increased by 60-70%.
“Last year, 3.5 million barrel a day of refined product flows was shipped via the Suez, a record annual high, making up 14 per cent of total refined product flows. Jet fuel is the most exposed, with 33 per cent of exports utilising the canal,” The Indian Express reported citing Kpler’s report.
“Flows of these products are already disrupted with some cargoes travelling via the Cape (of Good Hope), while others are waiting in the Arabian Sea. The surge in freight rates has also closed arbitrages which will restrict long haul flows to Europe.”
India exports a variety of goods via the Red Sea including petroleum products. The country’s export of petroleum products fell by 17.6% in December last year to $6.88 billion compared to $8.35 billion in December 2022, as per the latest government data. The exports were 15.6% down during the first nine months of the current fiscal at $62.07 billion.
Not just India faces a threat in its export volumes of petroleum products, but the country’s own domestic consumption is seen registering a modest 3% growth in the financial year beginning April 1, data published by the Petroleum Planning and Analysis Cell showed. The growth will be lowest since FY22.
The country’s demand for petroleum products including jet fuel, diesel, LPG among others is likely to grow to 239 million tonne in the financial year 2024-25. The country’s consumption of petroleum products stood at 233 million tonne last year, the data showed.
Source:financialexpress.com