India diversifies petroleum exports as traditional buyers cut sourcing

Move comes as traditional buyers of the country reduce imports

India is shifting its refined petroleum exports to newer destinations such as Jordan, Hong Kong, and Spain, as traditional buyers like the Netherlands, France, and Indonesia reduce their imports. 

The US stepped up pressure on India to halt purchases of discounted Russian crude oil after Donald Trump assumed office in January this year. On August 7, US President Trump imposed an additional 25 per cent tariff on India for buying Russian oil, effective from August 27, doubling the total tariff to 50 per cent.  

The US has also urged the European Union to apply secondary sanctions on India, implicitly discouraging its member states from purchasing Indian petroleum products. 

Disaggregated data released by the commerce department showed that India’s shipments of petroleum products fell 5.6 per cent in volume during H1 (April–September) of 2025-26 (FY26). The share of petroleum products in India’s total exports also declined from 17.1 per cent in H1 of 2024-25 to 13.8 per cent in H1FY26. 

During the first six months of the current financial year, the Netherlands — India’s largest destination for petroleum products — cut its energy imports from India by 20.4 per cent in volume terms. The Port of Rotterdam acts as Europe’s transshipment and storage hub, from where refined petroleum products are distributed across European countries. 

The largest reductions in energy imports came from France (-85 per cent), Indonesia (-81.1 per cent), the UK (-50.1 per cent), Malaysia (-43.2 per cent), and South Africa (-22.3 per cent) during H1FY26. 

However, India offset the decline in exports to traditional destinations by sharply ramping up shipments to Jordan (18,086 per cent), Hong Kong (17,006 per cent), Spain (13,436 per cent), the Philippines (2,235 per cent), and Namibia (1,068 per cent) in H1FY26. China (145 per cent) and Argentina (110 per cent) also more than doubled their energy imports from India during the same period. 

Last month, the US imposed sanctions on Russia’s largest oil producers — Rosneft and Lukoil — in a renewed bid to end the war in Ukraine. The move is expected to impact oil purchases by India’s private refiners, including Reliance Industries (RIL) and Nayara Energy, while state-run refiners, which primarily buy Russian crude through traders, are likely to remain largely unaffected for now. 

“Private players have been wary of sourcing crude oil from Russia. That’s why companies must have shifted trade routes. Earlier, the products were headed to Europe, but now the region is becoming more sensitive, prompting companies to divert shipments to Africa and South America,” said a refinery executive. 

Among India’s major refineries, state-run firms such as IndianOil, Bharat Petroleum, and Hindustan Petroleum mainly cater to the domestic market, while private players like RIL and Nayara drive the country’s petroleum product exports. Among oil public sector undertakings, IndianOil exports only a small share of its products, mostly routed through traders.