India’s Fuel Demand Softens Despite Record Crude Imports

The cooling trend in June demand reflects a 3.1% year-on-year contraction. Gasoline sales, while down 3.2% from May, showed resilience with a 7.4% annual increase, partially driven by export opportunities to Russia where drone strikes have crippled local refinery output. Diesel sales followed a similar pattern, rising 6.2% compared to the previous year despite a slight monthly dip.

To compensate for supply volatility, India ramped up imports to a record 5 million barrels per day in June. Russian crude accounted for 2.6 million barrels of that total, bolstered by a now-expired U.S. waiver on tanker-borne shipments. As Indian refiners pivot away from traditional Middle Eastern routes to mitigate transit risks, the focus shifts to maintaining domestic inventory levels that were significantly depleted during the spring months. With Middle Eastern energy flows showing signs of recovery, the country looks to stabilize its energy security despite experiencing four separate price hikes over the past month.