Archive · 16 Aug 2026
Global Diesel Crisis Deepens as India Largely Escapes Supply Crunch
The world is running low on a special fuel called diesel that powers trucks, farms and factories.
Wars and unrest in Russia and Iran have made it harder for countries to get this fuel.
Europe has been hit especially hard - its diesel stockpiles are at the lowest levels since 2014, and the profit margin on making diesel hit a record high.
India has many big factories, called refineries, that turn thick crude oil into diesel.
Because India makes more fuel than it needs, it has escaped the shortage and has even been sending diesel to Europe.
India also buys cheap oil from Russia, and in July more than half of its imported oil came from there, which has drawn criticism from the United States.
Experts say that if India stopped buying so much Russian oil, its oil bill could rise by 5-10 billion dollars in a year and push up prices a little.
Countries near India are not as lucky - Bangladesh is facing its worst power crisis in years because there is not enough natural gas to make electricity.
Bangladesh has asked India to send extra diesel, and India already supplies some through a pipeline called the Bangladesh-India Friendship Pipeline.
Pakistan has also raised petrol and diesel prices because international oil prices keep going up and down.
Global diesel supply has tightened due to the Russia-Ukraine war, the Iran crisis and Russia's export restrictions, with IEA data showing exports from Russia, the Middle East and Asia down 1.3 million barrels per day year-on-year.
European diesel stockpiles have fallen to their lowest levels since 2014, and diesel profit margins hit an all-time record high of $74.66 per barrel in late July.
India has largely escaped the crunch, exporting an estimated 4.2-5 million barrels of diesel to Europe in July, while all 100,000-plus Indian retail fuel outlets remained open without rationing.
India's crude imports topped 5 million barrels per day in July, with Russian crude at a record 2.8 million bpd - over 55.5% of the total, per Kpler - even as the US debated a 100% tariff.
Bangladesh is battling its worst power crisis in years due to a natural gas shortage; Dhaka asked India for extra diesel and India's Ministry of External Affairs said it would examine the request, while Pakistan raised fuel prices.
- Who
- India, Europe, Bangladesh and Pakistan are most involved, with Russia and Iran as supply-side factors. Data comes from the International Energy Agency (IEA) and Kpler, and economist Santosh Mehrotra commented on India's oil import bill.
- What
- A global diesel supply crunch triggered by the Russia-Ukraine war, the Iran crisis and Russia's export restrictions; India has largely escaped it, while Europe faces record diesel costs and Bangladesh a severe power crisis.
- When
- Reported in August, drawing on the IEA's August monthly report, July trade data and end-July price records.
- Where
- Globally, with the spotlight on India, Europe, West Asia, Russia, Bangladesh and Pakistan.
- Why
- Wartime supply disruptions - the Russia-Ukraine war, the Iran crisis and Russia's diesel export restrictions - cut seaborne exports, pushed up prices and strained fuel markets across regions.
India's view: keep buying discounted Russian crude
US pressure: reduce reliance on Russian crude
Imports of Russian crude
India's view: keep buying discounted Russian crude
Indian refiners stepped up purchases of discounted Russian barrels, reaching a record ~2.8 million bpd (55.5% of July imports), helping contain oil import costs amid the West Asia crisis.
US pressure: reduce reliance on Russian crude
The United States has censured the purchases and debated a 100% tariff, reflecting pressure on India to cut its dependence on Russian energy.
Fuel exports vs domestic supply
India's view: keep buying discounted Russian crude
India capitalised on its swing-barrel position, exporting an estimated 4.2-5 million barrels of diesel to Europe in July and benefiting from surging European demand.
US pressure: reduce reliance on Russian crude
In May, the government prioritised domestic supply during the Iran war shock and refinery maintenance, pushing fuel exports to their lowest level in nearly four years.
- IEA export data
- Russian, Middle East and Asian diesel exports down 1.3 million bpd year-on-year (~20% of global seaborne trade)
- Jet fuel export data
- Down ~670,000 bpd year-on-year, equal to 34% of global trade
- European diesel stockpiles
- Lowest since 2014
- European diesel profit margin
- Record $74.66 per barrel in late July
- India's July diesel exports to Europe
- Estimated 4.2-5 million barrels
- India's FY26 high-speed diesel exports
- 27.3 million metric tonnes (Petroleum Planning and Analysis Cell data, March)
- Russia's share of India's July crude imports
- Over 55.5% - a record ~2.8 million bpd (Kpler)
- India-Bangladesh diesel supply
- Around 5,000 metric tonnes via the Bangladesh-India Friendship Pipeline