Amid Ukraine war, Netherlands continues to be top destination for India’s petroleum exports

New Delhi: The Netherlands, with its developed transit ports,  continues to be the top destination for India’s petroleum exports, with shipments to Europe accounting for $4.4 billion during April-May 2024, up from $2.8 billion in the same period of the previous year.

India, a key Asian refining hub with an installed capacity of nearly 250 million tonnes per annum across 23 refineries, has expanded the export market for refined petroleum products by continuing to buy cheap crude from sanctions-hit Russia since the beginning of the Ukraine war, processing it and exporting a large chunk of it.

According to data from the commerce ministry, petroleum exports to the Netherlands have picked up pace during the early months of FY25.

During April-May 2024, India exported petroleum products worth $3.9 billion to the Netherlands. It sold petroleum products worth $14.29 billion to the Netherlands during FY24.

In November 2022, Mint reported the Netherlands has emerged as the top destination for India’s petroleum product exports, such as petrol and diesel, resulting in the country becoming one of the biggest markets for Indian exports.

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The Netherlands accounted for nearly 25% of India’s total petroleum product exports during April 2024 at  ₹1.74 billion, a growth of 73.6% over the corresponding period last year.

India's other top export destinations

India's top export destinations for its petroleum products also include the UAE, Singapore, South Africa, the US and Malaysia.

Indian exports of diesel and ATF (aviation turbine fuel) to the Netherlands has jumped 1152.5% and 480.6% respectively between FY2021 and FY 2024, which coincides with the West's sanctions on Russia for invading Ukraine in February 2022, said Ajay Srivastava, a former Indian Trade Service official and founder of the Global Trade Research Initiative (GTRI).

“The Netherlands has a well-developed port infrastructure and logistics network, making it a prime location for storing and re-distributing petroleum products to other European countries. Indian refiners use the Netherlands as a hub to reach other European markets,” he said. 

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“India has been buying discounted Russian crude oil and refining it into usable products. Since India can't directly sell these products to some European countries due to sanctions, the Netherlands might be acting as an intermediary,” he added. 

The prices of Brent crude has increased nearly 14% since January. The September contract of Brent on the Intercontinental Exchange ended at $85 per barrel on 28 June.

According to data from the government’s Niryat portal, India's export value of petroleum products stood at $12.87 billion in April-May 2024, up 7.6% from $11.96 billion in the year-ago period.

Petroleum exports to Europe, and ASEAN regions rose, while exports to South America, Africa, North East Asia and Oceania saw a decline in value terms.

Emailed queries sent to the commerce and petroleum ministries remained unanswered.

Meanwhile, Russia continued to be the top oil supplier to India, followed by Iraq and Saudi Arabia during May. 

According to Reuters, India's oil imports from Russia rose to a record of about 2.1 million barrels per day (bpd) in May as discounts for Russian oil widened on lower demand from China.