Europe leans on Indian fuels before 2026 ban, while US hits back with tariffs

By: Team India Tracker

One of the main factors driving the jump in diesel exports to Europe is the decision to bring forward the maintenance shutdown of Shell’s Pernis refinery in the Netherlands from 2026.

India’s diesel exports to Europe surged to an 11-month high in August, buoyed by strong demand ahead of the European Union’s impending ban on petroleum products refined from Russian crude starting January 2026. Vessel tracking data shows that the continent has stepped up purchases from India as it looks to build stockpiles and cushion against anticipated supply disruptions.

The spike in Indian shipments comes against the backdrop of rising criticism from the US and its allies, who accuse New Delhi of reaping windfall gains by processing discounted Russian crude and selling the refined fuels, largely to Europe, which itself has banned Russian oil. India has dismissed such charges, arguing that its trade practices remain legal and transparent, while noting that nations unhappy with the arrangement are free to halt their imports.

According to preliminary tanker data from global analytics firm Kpler, India’s diesel exports to Europe touched roughly 260,000 barrels per day (bpd) in August, an increase of nearly 63 percent over July and more than double the volumes recorded a year earlier. All of these exports originated from Reliance Industries (RIL), the country’s largest private refiner and fuel exporter. Overall, India’s petroleum product exports to Europe rose 41 percent month-on-month to nearly 399,000 bpd in August. 

One of the main factors driving the jump in diesel exports to Europe is the decision to bring forward the maintenance shutdown of Shell’s Pernis refinery in the Netherlands from 2026. Industry observers see this move as part of Europe’s strategy to avoid refinery turnaround schedules clashing with the EU’s January 2026 ban on petroleum products refined from Russian crude. However, uncertainty remains over how the ban will actually be enforced, given that refineries worldwide typically process a blend of crudes from multiple sources, not just Russia. This raises concerns that European nations could risk losing supplies from major exporters such as India, China, and Turkey.

Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler said, “This (advancing of maintenance at Pernis refinery) has surprised the market and us also; it was not what we expected. This shift likely reflects anticipation of the January 2026 EU sanctions on products refined from Russian crude. Exports should stay firm, and European buyers may accelerate liftings of gasoil (diesel) and jet fuel from India, given that in January 2026, sanctions kick in and the Middle Eastern refineries will be having a high maintenance in October-November, echoing the stockpiling seen ahead of the February 2023 EU ban on Russian products. This underscores India’s pivotal role as a swing supplier of middle distillates (fuels like diesel, jet fuel, and kerosene) to Europe. 

The European Union imposed a ban on petroleum product imports from Russia, its principal supplier in February 2023 as part of its sanctions over the war in Ukraine. In the run-up to the embargo, European nations ramped up their purchases, creating large stockpiles to cushion against potential supply disruptions.

Recently, India’s Finance Minister Nirmala Sitharaman said that India will continue to buy oil from Russia amid high tariffs from the US. With Europe and the U.S. cutting back on Russian oil following Moscow’s 2022 invasion of Ukraine, India has emerged as the biggest buyer of Russian seaborne crude, capitalizing on steep discounts. New Delhi has defended its purchases, arguing that they play a key role in stabilizing global energy markets. However, the US President Donald Trump, who is pushing to mediate an end to the Ukraine conflict, has criticized India’s oil trade with Russia, claiming it indirectly finances Moscow’s war. Last month, he imposed a 50 percent tariff on imports from India in response.