India’s diesel export to Singapore set to jump

India's diesel exports to Singapore are set to hit a 19-month high in August and exceed 330,000 metric tons, boosted by cheaper freight costs and low inventories in the Asian oil hub, traders and analysts said.

The country's exports of the fuel for August to Europe, on the other hand, are poised to fall to their lowest this year, according to one shiptracker, as shipments to the east are more profitable, but that situation may not last.

The rise in Indian diesel exports to Singapore will compensate partially for lower exports from refiners in northeast Asia including China, and the increased availability will therefore cap strong refining margins in Asia. Conversely, European refiners' margins will be supported by the lower imports from the South Asian nation.

India is on track to ship between 330,000 and 439,000 tons of diesel in August to Singapore, shiptracking data from Refinitiv, Vortexa and Kpler showed.

The volume is the highest since January 2022, said Serena Huang, Vortexa's head of Asia-Pacific analysis.

"The seasonal lull in India's gasoline and diesel domestic demand due to the monsoon has seen the country raising its clean product exports for August to date," she said, referring to refined products such as diesel, jet fuel and gasoline.

Freight costs for the India-Singapore route were around $21 per ton cheaper than the India-northwest Europe route in end-July, compared with $14 a ton in mid-July, data from Sparta Commodities showed, making it more lucrative for sellers to send cargoes east.

Replenishment of stocks in Singapore, where commercial inventories of the fuel remain near eight-month lows, is also driving the flows, said Sparta analyst James Noel-Beswick.