India’s petroleum product exports declined 16% year-on-year to $12.3 billion in the first four months of FY26 (April–July), down from $14.7 billion in the same period last year, according to data released by the Petroleum Planning and Analysis Cell (PPAC). The drop comes despite stable export volumes, indicating a sharp fall in global prices and rising geopolitical constraints, particularly from the European Union’s latest sanctions on Russian oil.
In volume terms, exports remained largely unchanged at 20.1 million tonnes, suggesting that the decline was driven primarily by lower realizations and pricing pressures. Imports of refined oil products also fell 4% to $7.6 billion, with inbound volumes steady at 16.7 million tonnes.
🧭 Comparative Export and Import Performance: Apr–Jul FY25 vs FY26
| Metric | Apr–Jul FY25 | Apr–Jul FY26 | YoY Change (%) |
|---|---|---|---|
| Petroleum Product Exports ($ bn) | $14.7 | $12.3 | -16.33% |
| Export Volume (mn tonnes) | 20.0 | 20.1 | +0.50% |
| Refined Product Imports ($ bn) | $7.9 | $7.6 | -3.80% |
| Import Volume (mn tonnes) | 16.6 | 16.7 | +0.60% |
The data underscores a growing disconnect between volume and value, as global oil prices continue to soften and sanctions disrupt traditional trade flows.
🔍 EU Sanctions Disrupt India’s Refined Fuel Trade
Europe has emerged as India’s largest market for refined petroleum products since the Russia–Ukraine conflict began. However, the EU’s latest sanctions package has introduced new restrictions on imports of fuels refined from Russian crude, directly impacting Indian refiners such as Nayara Energy and Reliance Industries.
| EU Sanction Measures | Impact on Indian Refiners |
|---|---|
| Ban on fuels refined from Russian crude | Limits exports from Indian refineries using Russian oil |
| Banking and shipping curbs | Increases transaction complexity |
| Price cap enforcement | Reduces margins on refined exports |
| Targeting Rosneft-backed Nayara Energy | Operational scrutiny and reputational risk |
Nayara Energy, which operates a major refinery in Gujarat, has pushed back against the sanctions, stating that its operations remain unaffected and committed to domestic supply continuity.
📉 Price Pressure and Maintenance Shutdowns Add to Decline
Global benchmark Brent crude averaged $67 per barrel during April–July 2025, down from $83 in the same period last year. Lower prices, coupled with planned maintenance shutdowns at key Indian refineries, have contributed to reduced export earnings.
Kpler, a global energy analytics firm, anticipates a temporary decline in crude processing volumes of around 250,000 barrels per day in Q2 FY26, as Reliance Industries, Indian Oil Corporation, and Mangalore Refinery and Petrochemicals undertake scheduled maintenance.
| Refinery Name | Maintenance Schedule | Estimated Impact on Processing |
|---|---|---|
| Reliance Industries (Jamnagar) | June–August 2025 | -100,000 bpd |
| Indian Oil Corporation (Panipat) | July–September 2025 | -80,000 bpd |
| MRPL (Mangalore) | May–July 2025 | -70,000 bpd |
These shutdowns are expected to temporarily reduce export volumes and impact domestic supply chains.
🧠 Domestic Demand Trends: Mixed Signals
While exports have declined, domestic fuel consumption has shown mixed trends. Petrol and LPG demand rose 6.8% and 7.5% respectively, while diesel—the most consumed fuel—grew by a modest 2.6%. Jet fuel demand slowed to 2.3% growth, reflecting subdued aviation activity.
| Fuel Type | Apr–Jul FY26 Demand Growth (%) |
|---|---|
| Petrol | +6.8% |
| LPG | +7.5% |
| Diesel | +2.6% |
| Jet Fuel | +2.3% |
| Fuel Oil, Naphtha | -4.2% |
| Pet Coke | -3.5% |
The overall domestic demand contraction of 0.5% during April–July has added to the pressure on refiners, who rely on export markets to absorb surplus production.
🧠 Strategic Implications for Indian Refiners
With Europe tightening its import norms and global prices under pressure, Indian refiners may need to recalibrate their export strategies. Experts suggest a shift toward term deals, diversification of sourcing, and increased focus on Asian and African markets.
| Strategic Response | Potential Benefit |
|---|---|
| Diversify Export Destinations | Reduce dependence on Europe |
| Hedge via Term Contracts | Stabilize margins and reduce volatility |
| Increase Domestic Distribution | Offset export losses with inland sales |
| Invest in Green Refining | Align with ESG norms and future compliance |
Privately owned refiners like Reliance Industries, which have become major importers of Russian crude, may face additional scrutiny and logistical challenges in executing sanctioned barrels.
📌 Conclusion
India’s petroleum product exports have taken a significant hit in the first four months of FY26, falling 16% to $12.3 billion amid global price softness, EU sanctions, and refinery maintenance shutdowns. While export volumes remain stable, the value erosion highlights the vulnerability of India’s refined fuel trade to geopolitical and regulatory shifts.
As refiners navigate complex supply chains and shifting demand patterns, strategic diversification and operational agility will be key to sustaining margins and market share. With Europe tightening its stance and domestic demand showing uneven growth, the road ahead for India’s petroleum export sector will require careful recalibration.
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Disclaimer: This article is based on publicly available news reports and official statements as of August 25, 2025. It is intended for informational purposes only and does not constitute financial, legal, or investment advice.
