India’s diesel exports to Southeast Asia hit highest level in seven years.
Iran conflict disrupts Middle East supply, tightening Asian fuel markets significantly.
Reliance leads shipments as trade flows shift to capture higher margins.
India’s diesel exports to Southeast Asia increased to the highest in more than seven years in March, Reuters revealed citing Kpler data, as traders pivoted supply to cover short positions and refiners crashed in on higher profits in Asia caused by the US-Israeli war with Iran.
The surge in exports may boost spot sale margins for Indian refiners who have purchased large volumes of prompt Russian crude to replace Middle East supply disrupted by the war.
2 March 2026
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Reuters further stated that nearly 90%% of these volumes were shipped by Reliance Industries, which is an operator of the world’s largest refining complex.
Flows Rebalance as Gap Narrows
Traders tapped India’s diesel supply for Southeast Asia and Australia after the Middle East conflict disrupted crude supplies to Asia, leading refineries to cut output and countries including China to ban exports of refined products.
“Asian buyers that usually rely on Chinese and northeast Asia must seek alternative supply, with India’s Reliance being one of the main candidates in the region” analysts from consultancy FGE NexantECA told Reuters.
Also known as a swing supplier in global oil markets as it can sell its refined products either to Europe or Asia, whichever is more profitable.
These shipments will help to ease supply tightness going into April, traders said. Some analysts expect the trend to last in the near term despite the Indian government reinstating export taxes for diesel.
Sparta Commodities’ analyst James Noel-Beswick said its arbitrage calculations suggested that the trade flow can continue into August at least.
The US has issued temporary waivers for the sale of Russian and Iranian oil cargoes at sea to ease global prices.
Front month April east-west price spreads, the difference between Singapore paper swaps on a free on board basis and ICE gasoil futures, narrowed to an average discount of $20 a ton in the week of March 27, LSEG pricing data showed, with spreads trading at premiums for some sessions.
Global Diesel Trade Shifts
The International Energy Agency report stated that changes in trade flows and supply problems often lead to refined fuel exports going to markets with higher margins during times of geopolitical tension.
Asian markets have become tighter because of recent instability in Middle Eastern supplies. This has led refiners like India to step in, as demand in the region remains strong and other suppliers are having trouble meeting it.
