The influx of Indian fuel coincides with the recovery of regional refinery operations after maintenance, which could weigh on spot premiums as buyers adjust to the increased supply. Additionally, some Asian cargoes are being diverted to the U.S. West Coast, where refinery outages have created profitable arbitrage opportunities for traders. One trader alone is sending 450,000 barrels to the U.S. this month.
Asia’s jet fuel imports from India are poised to reach multi-year highs in November, driven by peak winter demand and reduced exports from China due to refinery outages. Shiptracking data and industry sources indicate that Indian aviation fuel exports to hubs like Singapore, Hong Kong, and Malaysia will total approximately 2.7 million barrels, marking a 40% increase from October and the highest level since 2017.
One major factor is the flexibility of Indian refineries, which have been processing cheap Russian crude since 2022. This allows them to shift exports between Europe and Asia based on arbitrage opportunities. The recent closure of the arbitrage window to Europe has prompted Indian barrels to flow toward Asian markets.
Supply tightness in Asia has also created a favourable environment for Indian exports. Seasonal kerosene stockpiling in Japan and refinery outages in Malaysia over recent months have tightened regional supplies. These dynamics have enabled Indian refiners to fill the gap, with Singapore receiving more than 50% of these shipments. Meanwhile, Malaysia’s jet fuel exports have fallen to multi-year lows of 150,000 barrels, and Japan’s imports of jet fuel and kerosene are expected to hit a nine-month high of 1.34 million barrels.
Domestically, weaker-than-expected aviation fuel demand in India has left refiners with surplus stock. According to LSEG Oil Research, September consumption levels in India were still 16% below pre-pandemic levels, which has supported the increased focus on exports. The combination of regional demand dynamics and India’s export capacity has firmly positioned the country as a key supplier in the Asian jet fuel market.
