Record Growth Amid Sanctions and Refinery Disruptions
India’s diesel exports to Europe surged in August 2025, climbing to 242,000 barrels per day (bpd)—a dramatic 137% increase from July and 73% higher than in August 2024, according to The Economic Times. The figure also exceeded the twelve-month average by 124%, making August a record month for shipments.
This sharp rise comes as the European Union prepares for a new sanctions package: starting in January 2026, the EU will prohibit imports of fuels refined from Russian crude oil, even if processed outside Russia.
European buyers, wary of looming restrictions and the seasonal demand spike, have accelerated their purchases from India, the world’s third-largest oil importer.
European Imports Are Rising Ahead of a Ban
Several developments have converged to push European demand toward Indian refiners. Temporary supply shortages arose from maintenance work at large European facilities, including Shell’s Pernis refinery in the Netherlands.
At the same time, buyers are building up stocks ahead of the winter heating season and in anticipation of tighter sanctions. Refinery maintenance in the Middle East scheduled for late 2025 could further tighten supplies, positioning India as a critical alternative source.
The result is that India’s total diesel exports, not just to Europe, also rose strongly in August, reaching more than 600,000 bpd, a 17% increase compared with July. Analysts expect European demand for Indian products to remain high through the end of the year.
Buying Russian crude and reselling refined products to Europe
The surge is not without controversy. The US has repeatedly criticized India’s refining strategy, accusing New Delhi of buying discounted Russian crude and reselling the refined products—diesel, gasoline, and aviation fuel—to Europe at market prices. Senior U.S. officials argue that this practice undermines sanctions designed to cut off Moscow’s war revenues.
U.S. President Donald Trump recently doubled tariffs on Indian goods to 50%, citing the need to pressure India into curbing its purchases of Russian oil. The White House stressed that such measures were part of a broader effort to starve Russia’s treasury, which continues to finance its full-scale war against Ukraine.
India, however, has defended its policy. Officials in New Delhi emphasize that Russian crude, while important, is only one component of a diversified import basket essential to India’s energy security.
They have also criticized what they see as a selective Western approach, pointing out that several other countries continue to buy Russian hydrocarbons without facing the same level of scrutiny.
What Lies Ahead
This moment highlights a key challenge for Europe. On the one hand, the EU is making progress in reducing its dependency on Russian energy. Conversely, the continent’s dependence on Indian refined products demonstrates the transformation of global energy flows, not their cessation.
The EU’s REPowerEU roadmap foresees a complete halt to Russian gas imports by the end of 2027 and significant reductions in oil and nuclear fuel reliance. Yet the August spike in Indian diesel exports shows how enforcement gaps and market adaptations can blunt the intended impact of sanctions.
For India, the surge underscores both opportunity and risk. Refiners benefit from strong export demand, but geopolitical pressure from the U.S. and Europe may complicate trade relations at a time when New Delhi is also navigating tariff disputes with the U.S.
