Global diesel deficit lifts India's petroleum export share to three-year high

The share of petroleum products in India’s gross exports by value rose to 11.2 percent during the July-September quarter of fiscal year 2027, marking the highest quarterly level in the last twelve quarters. According to The Hindu BusinessLine, this increase was driven by a severe global diesel shortage that acted as a tailwind for Indian refiners. Data from the Petroleum Planning and Analysis Cell showed that the monthly export share averaged 11.2 percent for the quarter, with July at 11.4 percent, August at 11.3 percent, and September at 10.9 percent. This performance exceeded the previous peak recorded in the third quarter of fiscal year 2024.

Indian refiners exported 15.1 million tonnes of refined products, including diesel and jet fuel, during this period. The Hindu BusinessLine reported that these export earnings amounted to $14.8 billion, which compensated for slightly more than 31 percent of the $47.4 billion import bill for crude oil and refined products. Given that India imports over 88 percent of its domestic crude oil requirement, the higher export share provided a moderate offset to the costs associated with elevated crude oil prices.

The global market tightness was attributed by analysts and traders to multiple disruptions, including refinery outages in West Asia and drone attacks on Russian facilities. The Federal Reserve Bank of Dallas noted that global refining capacity declined by approximately 8 million barrels per day due to the closure of the Strait of Hormuz, Houthi attacks on Red Sea shipping, and export restrictions in China and Russia. Wholesale diesel prices in Singapore exceeded $200 per barrel in mid-September 2026, while prices in Europe and the United States reached all-time highs of around $220 per barrel.

The International Energy Agency stated that global diesel availability fell by 1.5 million barrels per day in the second quarter of 2026 and 1.7 million barrels per day in the third quarter compared to the previous year. The agency observed that while prices have eased from their September peaks, benchmarks remain nearly double the price of crude oil. The IEA expects market tightness to extend into 2027, noting that inventory replenishment is unlikely before the second half of that year despite a rapid recovery in refinery throughputs expected by year-end.