Diesel importers are turning toward India and South Korea to ease a tight supply after China cut exports amid domestic shortages. China’s retreat from the overseas markets, especially Asia, coincided with shrinking global diesel stockpiles and the demand rebound as economies emerged from coronavirus lockdowns. Ship-tracking data indicated that total diesel exports from India and South Korea increased 21% from August to 1.18 million bpd in September before easing slightly to 1.13 million bpd in October.
Indian refiners are filling the gap that their Chinese peers leave in Asian markets. However, it reduced exports to Europe. Diesel inventories in European independent storage tanks are at the lowest in eight years and are expected to keep declining until December. European buyers are also competing with African peers for Middle Eastern supplies after the maintenance shutdown of the Natref oil refinery in South Africa. However, the end of seasonal refinery maintenance in Russia is expected to increase diesel exports from the country to the Atlantic Basin region.
