The Daily Populous Monday September 2nd, 2024 evening edition
Authored by theprint.in and submitted by cheemjr

An analysis by ThePrint of trade data from the Ministry of Commerce and Industry showed that about 15 to 17 European countries featured among the top 100 countries that India exported petroleum products to every year.

These countries—among which the Netherlands tops the list—imported a total of 9,740.51 metric tonnes (MT) of petroleum products in 2018-2019, which jumped to a whopping 24.73 million MT in 2023-2024.

This translated to $5.9 billion worth of imports from India in 2018-2019, which grew to $20.5 billion in 2023-2024—a nearly 250 percent increase. The reason for the value not growing as much as the volume is that the pandemic saw oil prices plummet.

The Netherlands emerged as the top export destination within this group because it is home to the Rotterdam Port, the largest seaport in Europe, which functions as a hub for other key markets in the region.

Other countries on the list included the UK, France, Romania, Switzerland, Russia, Spain, Italy, Belgium, Norway, Poland, Bulgaria, Slovenia, Greece, Ukraine, Germany and Portugal. Finland was another key market, though over the six years, the size of its imports of Indian petroleum products has varied.

In FY24, these countries, together with the Netherlands, figured in the top 100 export destinations for Indian petroleum products. The top 100 list accounted for over 90 percent of India’s total exports of this commodity to the world.

Also Read: Lower oil prices lead to 4x profits for oil firms, bonanza for govt, but no relief for aam aadmi

The logistics behind the pandemic spike

According to Federation of Indian Export Organisations (FIEO) director-general and CEO Ajay Sahai, the surge in petroleum exports to European countries during the pandemic year of 2020-2021 was due to the over-supply of oil that year after demand cratered as countries locked down.

“Ports in countries like the Netherlands were offering vast storage capacities at low prices when global transit and logistics issues were at their height,” Sahai explained. “It’s possible that during that time, foreign oil companies changed their base (from other locations) and, therefore, parked their imports there (European countries).”

In other words, companies located in places like Singapore that were importing petroleum products from India could have relocated their operations to European countries, and, so, India’s exports would have been channelled to those countries instead.

Therefore, he said, this jump in petroleum exports to Europe shouldn’t be seen as a rise in demand for or consumption of Indian petroleum, but “a redistribution” of existing global petroleum supplies.

A top industry leader working in an Indian petrochemical company further explained that another reason for the jump in 2020-21 was that European refiners were not functioning during COVID-19, while Indian refiners were working “full steam ahead”.

“Indian refiners were buying cheap crude during the pandemic and selling the byproducts—mostly diesel—at a rampant pace,” the official said, on the condition of anonymity. “During COVID-19, there was less Indian demand for diesel because railways and trucks were not operational. But the Indian population still needed LPG (liquefied petroleum gas) and petrol to run their households and cars.”

“Therefore, Indian refiners had to continually evacuate their storage of diesel in order to keep cracking crude for petrol and other products,” he added.

Europe ‘caught napping’ by sanctions on Russia

The pandemic-induced factors continued to play out over 2021-22 as well, leading to high exports of Indian petroleum products to European countries.

Thereafter, however, the major driver of this growth was geopolitics. With the Russian invasion of Ukraine in February 2022 and the resultant sanctions laid on it by the US and other Western countries, not only did the price of oil start to rocket upward, but European countries also began looking for alternative sources for their oil and petroleum needs.

India, which continues to import large amounts of discounted Russian oil, has become the leading exporter of refined fuels to Europe. In 2021-2022, these European countries, including some outliers like Croatia, collectively imported $8.8 billion or 12.7 million MT of Indian petroleum products.

In a single year, by the end of 2022-2023, the volume of India’s exports of these products to Europe jumped to nearly 17 million MT, and the value almost doubled to $16.3 billion.

Indian private refiners Reliance Industries Ltd (RIL) and Nayara Energy, backed by Russia-stated own firm Rosneft, now control over a quarter of India’s bulk diesel market.

“As long as the embargo on Russian oil continues, these exports from India to European countries will only grow,” Biswajit Dhar, trade economist and distinguished professor at the Council for Social Development (CSD), told ThePrint.

“It’s clear the Europeans were caught napping by the enforcement of the US-led sanctions. The Americans managed to decouple themselves from the Russians and the Gulf countries to an extent and solved their own problems through fracking and whatnot. But the Europeans have endured the brunt of the sanctions on Russia,” he added.

Last May, German Ambassador to India Philipp Ackermann said Berlin has ““no problem”” with receiving refined oil from India. Months later, External Affairs Minister S Jaishankar said he’s ““waiting for a thank you”” from Europe after India’s policies helped “stabilise” global oil and gas markets.

Indeed, Europe’s imports of Indian petroleum products have continued to grow strongly. For instance, the 2023-2024 figures were a 46 percent jump in volume and a 26 percent increase in value from the previous year.

Also Read: Modi’s visit marks rare Ukraine trip by Putin friend, but Zelenskyy had a ‘curt’ message for India

AnthillOmbudsman on September 2nd, 2024 at 08:08 UTC »

253788% is a weird expression... 2537x is more meaningful.

Yeah, 9700 MT to 25 million MT is quite a jump.

jcrestor on September 2nd, 2024 at 05:12 UTC »

So in 2018 they exported basically nothing and now they export something?

Solid-Search-3341 on September 2nd, 2024 at 04:36 UTC »

So, do they just buy it from Russia and resell it or what ?