West Asia war fallout: Oil product exports find many new markets

NEW DELHI: The West Asia crisis has opened several new markets for India’s oil product exports, with Italy and Spain among those at the top of growth charts, while Singapore and Tanzania have zoomed past traditional destinations. Propelled by oil, Singapore has emerged as the third largest goods export destination for India, while Tanzania and South Africa have broken into top 10, according to disaggregated data for the first quarter. Among countries with close to a $1 billion of imports from India, govt data showed that the highest growth was in countries, such as Tanzania, Jordan and Sri Lanka (See graphic). Of course, higher prices have also had a role to play in value of exports rising. In almost all cases – barring Hong Kong and Vietnam – the rise in exports was driven by oil product shipments, with countries relying on Indian refineries to meet their requirements, amid supply disruptions. In fact, since the war started in West Asia, govt had to impose windfall tax on certain products to keep a check on outward movement. Since the war started in West Asia, govt had to impose windfall tax on certain products to keep a check on outward movement. As a result, the share of oil products in the exports to these countries has gone up significantly. For instance, the share of oil products in India’s exports to Tanzania has increased to 77% at the end of the June quarter, compared with 59% a year ago, while it has doubled to 32% in the case of Sri Lanka. Two-thirds of exports to Singapore – the largest destination for export of India refined petroleum products – are now accounted for by refined goods - against 40% during April-June 2025. For countries such as Spain and France, now share of oil products is around 15%, compared to nearly zero last year. When it comes to growth rates too, Spain is near the top, with the value of oil product shipments zooming from $4 million in the first quarter of the last fiscal year to $252 million this year – a 63-fold jump. Italy is on top, with exports soaring from $2 million to $478 million, official data showed. And when it comes to the top destinations, Singapore overtook the Netherlands, UAE, the US and Australia, with the value of oil product exports pegged at $4.3 billion, followed by Tanzania ($2.2 billion) and the Netherlands ($2billion) despite a 41% decline.