India’s Diesel Exports to Europe Track Two-Year Low

India’s diesel exports to Europe are down by around 80% on the month to 33.4kbpd-58kbpd this month, Kpler, LSEG and Vortexa ship-tracking data showed, tracking the lowest in two years, as Red Sea disruptions shored up freight costs.

• Continuing high freight costs would likely encourage sellers of Indian cargoes to look to Asia for buyers soon, which would further tighten European supplies ahead of spring maintenance, traders told Reuters.
• Freight rates on the Asia-Europe route have risen more than 30% in the past, traders added.
• "Disruptions in the Red Sea coincide with the start of global refining maintenance season, with US outages projected to peak in February and European overhauls around March," analysts at Gibson said.
• Analysts at Sparta Commodities said that high freight rates were hindering the opening of an arbitrage from the US Gulf Coast to Europe.
• The spread between the two front-month European ICE low-sulphur gasoil futures contracts surged to $23/t in backwardation on Monday, the highest since mid-December, indicating market expectations of supply tightness.
• "The gains witnessed in ICE GO (gasoil) cracks and spreads show resilience and are poised to continue their rise, at least in the short term," Sparta said.