The Centre has confirmed that India, the second-largest exporter of seaborne diesel this year, has no plans to follow suit if the United States imposes a ban on overseas sales.
“We honour our commitments,” Oil Minister Hardeep Puri said of export contracts at an event in New Delhi on Thursday. 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 US-Iran war in West Asia 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.
US crackdown amid high pump prices
Pump prices in the US 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 he has encouraged his team to support a restriction on diesel shipments, and the proposal in being studied by his economic advisers.
Given Moscow’s curbs, India has overtaken Russia this year as the top supplier after the US, accounting for about 10% of global diesel shipments, according to trade intelligence platform Kpler. That has made the country an increasingly important source of the fuel.
The European Union has expressed concern about the potential US 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.
Undermining buyers’ trust
Puri pointed to Indian Oil Corporation’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 one million barrels a day of fuels.
Investments in refi ning to continue
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.
