India is expected to export up to 1.55 million barrels per day
The escalation of the Middle East conflict and a renewed surge in refining margins are driving India toward record-high refined petroleum exports, as the country's refineries accelerate production to capitalize on favorable market conditions. According to data from Kpler, cited by Reuters columnist Clyde Russell, India is expected to export up to 1.55 million barrels per day (bpd) of light and middle distillates in July, marking the second-highest figure recorded since 2017. Fuel exports have nearly doubled compared to May, when they stood at just 866,000 barrels per day. At that time, the crisis in the Strait of Hormuz disrupted crude oil supplies to India and the rest of Asia, dragging the country's export volumes down to a four-year low.
Fuel supply tightened in Asia
The worsening situation in the Middle East and the breakdown of the cease-fire between the US and Iran two weeks ago sparked a fresh rally in refinery profit margins, as fuel supplies across Asia and other regional markets tightened. This development prompted Indian refineries to significantly boost their outward shipments to capture the elevated profitability. Earlier this month, Kpler had forecasted that India's refined product exports in July would hit their highest level since September 2025, with refiners eager to exploit the lucrative refining margins generated by market tightness across Asian fuel hubs.
Although India's surging export volumes are expected to provide temporary relief to the Asian market, they will likely fall short of fully offsetting the pressures caused by renewed disruptions in Middle Eastern crude supplies. The risks of loading delays remain elevated as regional hostilities persist. Simultaneously, Asian refiners that had anticipated increased crude deliveries from the Middle East in August now face the prospect of severe shipment delivery delays. The disruption to July and August loading schedules may force several refining facilities to scale back plans for increasing throughput over the coming weeks.
Conversely, refineries in the United States and Europe are already operating near maximum capacity. In Asia, however, the anticipated expansion in crude processing rates is now thrown into doubt, as the escalating Middle East crisis continues to disrupt global supply chains and inject fresh volatility into international energy markets.
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