India Boosts Diesel Exports with Refinery Expansions

India is preparing to increase its diesel exports next year with the commissioning of new refining capacities, helping to ease supply shortages in global markets struggling with fuel scarcity, from the United States to Europe. Indian Oil Minister Hardeep Singh Puri stated that state-owned refineries will add an annual diesel production capacity of no less than 15 million tons through a new refinery and expansions of existing facilities. Speaking at an industry conference in Goa, Puri said, "We will be in a comfortable position to refine oil not only to meet our own needs but also to meet the world's needs." Global diesel supplies have been disrupted by wars in the Middle East and the conflict between Russia and Ukraine, which have interrupted crude oil and fuel flows, pushing prices higher this year. Diesel supplies faced particular pressure after Russia halted exports in July to protect domestic supplies following attacks on its refineries and ports. This shortage drove U.S. diesel prices to record levels, prompting Washington to consider export restrictions before an agreement was reached between the U.S. and Russian presidents to pump more fuel into global markets. India, already one of the world's largest diesel suppliers, has benefited from these disruptions, surpassing Russia this year to become the world's second-largest diesel exporter, according to data from Kpler. Refinery expansions are expected to strengthen India's share in global fuel markets amid forecasts of continued supply tightness until 2027 by Goldman Sachs Group. Arvinder Singh Sahni, Chairman of Indian Oil Corp, the country's largest oil refiner, said the company expects to increase its annual diesel output by up to 9 million tons starting next year after completing expansions that will add more than 17 million tons to crude oil processing capacity across three refineries. Vikas Kushal, Chairman of Hindustan Petroleum, said the company will add about 4 million tons to its diesel production as its new refinery in Rajasthan, with a capacity of 9 million tons annually, reaches full operation. Numaligarh Refinery, part of Oil India, plans to raise fuel output to about 3 million tons, while Bharat Petroleum expects to add 1.5 million tons starting in 2028, according to its Chairman Sanjay Khanna. Indian refineries produced 59 million tons of diesel in the first half of the fiscal year starting in April, while domestic consumption was about 46 million tons, according to Ministry of Petroleum data. Puri noted that the country's total refining capacity is expected to rise to 300 million tons annually from about 267 million tons currently, with projections reaching 400 million tons within a few years. Mukesh Sahdev, founder, CEO, and chief oil analyst at XAnalysts, described India's refining capacity as a strategic advantage for the country.