India's fuel exports hit near four-year low amid West Asia supply disruptions

India's fuel exports fell to their lowest level in nearly four years in May as efforts to safeguard domestic energy supplies, refinery maintenance, and changes in production priorities reduced overseas shipments.

Exports of refined products, including diesel, petrol, and jet fuel, averaged about 878,000 barrels per day during the month, down 31% from a year earlier and the lowest level since October 2022, according to data from Kpler Ltd.

The decline comes as conflict in West Asia has disrupted energy trade and led to the near-closure of the Strait of Hormuz, a key route for global crude oil and fuel shipments. Countries across Asia responded by prioritising domestic energy security and limiting some exports.

A major factor behind India's export decline was an increase in liquefied petroleum gas (LPG) production. LPG is widely used as a household cooking fuel, and India previously imported around 90% of its requirements from West Asia.

According to Kpler's modelling and refining manager Sumit Ritolia, the shift toward higher LPG output reduced the volume of fuel available for export, particularly gasoline and gasoil.

India's refiners increased LPG production to a record 52,000 tonnes per day in May, according to Oil Ministry Joint Secretary Sujata Sharma. The figure was 50% higher than the level recorded a year earlier.

The government also imposed an export tax on gasoline for the first time in four years, adding further pressure on outbound shipments.

Reliance Industries, India's largest fuel exporter, redirected part of its fuel output to the domestic market after shutting a unit at its west coast refinery in mid-May. The refinery is primarily focused on serving local demand.

Meanwhile, some Asian countries, including South Korea, China, and Thailand, have begun easing earlier export restrictions after fuel stockpiles increased, reducing demand for Indian fuel exports in international markets.