Indian oil export basket in FY23 was most diversified ever, shows data

Israel, Brazil, and South Africa broke into top 10 list of destinations for Indian refined petroleum products

Even as India’s refined petroleum exports saw an intense growth in FY23, the export basket became the most diversified till now in terms of market reach.

Official data shows disparate geographies with relatively small amounts of historical trade, such as Israel, Brazil, and South Africa, broke into the top 10 list of destinations for Indian refined petroleum products in the first 11 months of FY23. 

The shift in India’s oil exports was due to new markets being tapped through a bilateral push, and represents India’s oil trade becoming more in tune with global flows, multiple officials told Business Standard.

“The oil export business is highly dynamic, price sensitive, and seasonal. It is driven by changes in shipping and logistics prices,” a senior official said.

"Historically, the government has never been involved with promoting petroleum exports. But over the past year, there have been several instances when government intervention was required to provide a bilateral push as petroleum was being shipped in large quantities to many new markets," the official said.

He said the move was only to help clear exports from state-run oil companies, such as Indian Oil Corporation.

Exports trump imports

The country’s overall import of crude oil rose 22 per cent to $150.1 billion in the April-February period of FY23, driven by Indian refiners getting access to much larger volumes of Russian crude oil over the past year at highly discounted prices.

However, officials said overall exports of refined petroleum grew at a faster clip despite counting for rising domestic consumption. Export of all categories of petroleum products rose by 32.5 percent in the first 11-months of FY23, climbing to $88.28 billion, from $69.5 billion in FY22.

For long India’s highest earning export sector, petroleum products in FY23 dominated an even higher share of overall exports. Its share in total export receipts shot up to 21.5 per cent in the latest year, up from 15.8 percent in FY22. Meanwhile, the second largest single category of exports — diamonds — made for 5.1 per cent of receipts in FY23, reducing from 6.01 per cent in the previous year.

Officials said the current trend was expected to continue for the time being as Russian oil continues to reach India.

India’s crude imports from Russia jumped about five times in FY23, unseating Saudi Arabia, United Arab Emirates, and Kuwait.

As of March, Russian crude was the largest source of oil for India, averaging 1.64 million barrels a day, estimates made by London-based commodity data analytics provider Vortexa, which tracks ship movements to estimate imports, shows.

Product markets diversifying
 

Most product categories under refined petroleum saw a marked increase in the number of nations exported to. Automotive diesel, the largest single component within India’s refined petrochemicals export list, saw the highest shipments to Israel. Egypt, South Africa, and Jordan all entered the top 10 destinations for Indian diesel for the first time.

Similarly, export of aviation turbine fuel (ATF) saw exports widening to 55 nations in FY23, from just 35 in FY22. Indian oil products significantly started entering new and emerging oil transit hubs. The small West African nation of Togo, which is increasingly becoming a key storage and transit hub to clear surplus East of Suez volumes, was the fourth largest receiver of ATF from India.

Even specialised products, such as various types of motor spirits, were exported for the first time to developing or underdeveloped economies, such as Tanzania, Guatemala, and Mozambique, for the first time, officials said.