India, the second-largest exporter of seaborne diesel this year, has no plans to follow suit if the U.S. imposes a ban on overseas sales.
“We honor our commitments,” Oil Minister Hardeep Puri said of export contracts at an event in New Delhi on September 24. The industry is well positioned as refining has expanded in recent years, with investments in capacity, he said.
The global diesel market has been squeezed this year by the combined impact of the U.S.-Iran war in the Middle East as well as the Russia-Ukraine conflict, with Moscow already curbing most overseas sales. The industrial fuel — vital for trucking, agriculture and construction — has rallied much more than crude oil, hurting businesses, farmers and consumers, while fanning inflation.
Pump prices in the U.S. have jumped to a record, spurring speculation that Washington may impose an export ban to keep supplies at home and bring local prices back down. President Donald Trump said this week that he’s encouraged his team to support a restriction on diesel shipments, and the proposal in now being studied by the U.S. leader’s economic advisers.
Given Moscow’s curbs, India has overtaken Russia this year as the top supplier after the U.S., accounting for about 10% of global shipments, according to Kpler. That’s made the country an increasingly important source of the fuel.
The European Union has expressed concern about the potential U.S. curb, which has spurred gains in local futures in expectation of a tighter market. Still at present, there’s no certainty Washington will follow through with restrictions.
Puri pointed to Indian Oil Corp.’s recent five-year agreement to supply fuel products to Mauritius, saying reneging on such commitments would undermine buyers’ trust in Indian shippers. The first cargo delivered as part of the deal has arrived in the island nation, Puri said in a post on X.
India has about 5.4 million barrels a day of refining capacity and imports about 90% of the crude it processes. Its large processing system and growing domestic capacity allow it to export more than 1 million barrels a day of fuels.
The South Asian country will continue investing in refining even as plants shut in parts of Europe, Puri said, positioning India to meet rising domestic demand, while remaining a major supplier to global markets.
Crude producers including Saudi Aramco and Abu Dhabi National Oil Co. are also interested in investing in Indian refining and are in talks, according to Puri.
“They want to come in,” he said. “Nobody wants to come and invest in a refinery unless they also get a slice of your growing downstream market.”
