October 19, 2026: A severe global diesel shortage acted as a tailwind for Indian refiners in raising the share of petroleum products in India’s gross exports (by value) during the July-September quarter in FY27 to its highest in the last 12 quarters.

According to data from the petroleum planning & analysis cell (PPAC), the share of petroleum products in India’s gross exports (by value) stood at 11.4 per cent in July 2026, 11.3 per cent (August) and 10.9 per cent in September, averaging at 11.2 per cent for Q2 FY27 (on a provisional basis)

This is the highest quarterly share since Q3 FY24. Export share averaged at 11.5 per cent (October 2023: 10.5 per cent; November: 12.9 per cent and December: 11.1 per cent). Indian refiners exported 15.1 million tonnes (mt) of refined products, such as diesel and jet fuel, during July to September in the current financial year.

It also helped in compensating for high crude oil prices, albeit in a moderate range, considering India imports more than 88 per cent of its domestic crude oil requirement.

While India’s crude oil and refined product import bill stood at $47.4 billion during Q2 FY27, export earnings were at $14.8 billion, helping to compensate for a little over 31 per cent of the import bill.

Analysts, traders and refiners indicated that West Asia refinery outages and drone attacks on Russian refineries impacted roughly 8 million barrels per day (mb/d) of global refining capacity. What has further tightened the market for diesel is curtailed Chinese refining and shipping constraints.

Wholesale diesel prices exceeded $200 a barrel in Singapore in mid-September 2026 and reached all-time highs of around $220 in Europe and the US. Retail prices rose in tandem to record levels in most major economies.

The Federal Bank of Dallas in a recent commentary said that global refinery capacity declined by as much as 10 per cent, or roughly 8 mb/d, due to closure of the Strait of Hormuz, attacks from Houthi rebels in Yemen on Red Sea shipping, damaged Middle East refineries, Ukrainian drone attacks on Russian refineries, and export restrictions in China and Russia

(Source: Hindu Business Line)