US Mulls 90-Day Diesel Export Ban As India’s Shipments Surge

The Trump administration is weighing a 90-day ban to US diesel exports, Politico reported, as the White House faces pressure to ease fuel prices before the November midterm elections. The plan has split officials and met resistance from the US fuel industry, which says export limits would offer only short-term relief before tightening supplies and lifting prices later.

India says it has no intention of restricting diesel shipments. “We honour our commitments,” Oil Minister Hardeep Puri told Bloomberg, while referring to existing diesel export contracts. Bloomberg reported that Puri said India has expanded refining capacity and is better positioned to deal with market disruptions.

That matters because the global diesel market is already under strain. Russia has cut supplies at times, West Asia remains disrupted and buyers across Europe, Africa, Asia and Latin America are chasing replacement cargoes.

India’s Export Surge

India’s role has expanded fast. Kpler data cited by Bloomberg showed India accounted for about 10% of global diesel shipments so far this year, leaving it the world’s second-largest seaborne diesel exporter and ahead of Russia.

The rise has been supported by India’s large refining base and its ability to swing fuel towards markets offering better margins. In July, Reuters, citing Kpler, said India’s refined-fuel exports averaged 1.53 million barrels per day, 27% above the prior 12-month average and the highest July level in Kpler’s records, which began in 2017.

Strong diesel margins helped, along with Russia’s export limits and higher refinery runs in India, which together lifted outbound shipments.

Where Cargoes Are Going

Cargoes are moving where shortages are deepest.

Reuters said India was on track to send 2.8 million barrels of diesel to Brazil in July, an 11-month high. In Africa, Reuters reported that Asia’s diesel exports to the continent, including shipments from India, reached a four-year high in August 2026 as buyers looked for alternatives after disruptions to Middle Eastern exports.

Southeast Asia also took more Indian fuel. Reuters data showed India’s diesel exports to the region hit a seven-year high in March 2026, driven by stronger regional refining profits and supply disruptions linked to the Iran conflict.

Turkey bought more as Russian supplies were disrupted. Its diesel imports from India rose to a record of more than 120,000 barrels per day in August 2026, according to Kpler shipping data cited by Reuters.

Europe stayed a major draw. Reliance Industries’ July shipments to Europe rose as the continent faced depleted inventories and supply disruptions from Russia and the Middle East. Reuters reported that European diesel margins hit a record $74 a barrel while stockpiles fell to their lowest since 2014.

Russia’s Supply Shock

Russia banned diesel exports for most of July after Ukrainian drone attacks damaged oil refineries and triggered domestic fuel shortages. That removed a major source of diesel from international markets and pushed more buyers towards alternative suppliers such as India.

Russia is the world’s second-largest seaborne diesel exporter. It has at times had to halt overseas shipments to shield its domestic market.

Reuters analysis showed the pressure has not eased, with global diesel markets still strained by disruptions in Russia and the wider West Asia crisis.

Can India Sustain

India can keep supplying diesel. The harder question is volume.

The country has enough refining capacity to remain an important supplier, but sustaining unusually high exports depends on more than crude availability or plant utilisation. In July, Reuters said freight economics were already changing as Asia also offered attractive diesel margins.

Moving one large shipment from India’s west coast to Europe can run above $5 million, or roughly $55 a tonne. That means the trade works only when European buyers pay a high enough premium.

Indian refiners can shift cargoes between Europe, Africa and Asia depending on price spreads, freight costs and local shortages. That flexibility helps, but it also means exports will move to the market offering the best returns.

Another limit is global refining capacity. Reuters reported that refineries worldwide are operating at or near full capacity while diesel inventories remain unusually low. Analysts cited in the report expect the shortage to continue into 2027.