India's diesel exports to Europe potentially surged to record in September

India's diesel exports to Europe probably hit an all-time high in September, data from shiptrackers and trade sources showed on Thursday, as traders cashed in on robust profits in the west during a refinery maintenance season.

September volumes from Asia's key swing supplier bound for Europe were at 1.3 MM metric t–1.4 MM metric t (9.7 MMbbl–10.4 MMbbl), data from LSEG, Kpler and two trade sources showed.

Shiptracking data showed India's exports to Europe reached these levels for the first time since such figures began to be recorded in 2017.

India's refiners, which source about a third of their crude from Russia, are boosting runs and redirecting surplus products abroad, with gasoline and diesel shipments hitting multi-year highs.

Total diesel exports for September were also at five-year highs of nearly 3 MMt, Kpler shiptracking data showed.

East-West spread widens. The diesel east-west spreads averaged $45 per metric ton in September, up from less than $30 in August, LSEG pricing data showed, spurring traders to move the product to Europe.

European prices strengthened as refinery maintenance has reduced diesel supply there, traders said.

In Europe, crude processing capacity of some 550,000 bpd–600,000 bpd is expected to be offline in October, two of the sources said, up from around 400,000 bpd in September.

Shipping costs have also fallen by about $10 per ton, data from two shipbrokers showed. The cost to ship 90,000 t of refined fuel on the India-Europe route fell to $3.25 MM–$3.5 MM in the second half of September from $4 MM–$4.2 MM in the period from the end of August to early September, the data showed.

The rise in India's shipments to Europe has tightened supply in Asia, pushing up 10-ppm sulfur gasoil cash premiums to nearly $1.50 a barrel, the highest in two months.

However, Vortexa's head of APAC analysis, Ivan Mathews, said he forecasts India's transport fuel exports to fall month on month in October due to higher domestic demand during the Diwali festive season.

Ultimately, this expected decline in exports could be limited as product cracks are higher than the same period last year, which could "incentivize export-oriented refiners in India to run harder on the margin" and encourage some export sales, he added.

Looking ahead, traders remained cautious on diesel volumes on the India-Europe trade route, given a lack of details about how the European Union's 18th sanction package banning refined products derived from Russian oil will affect India's fuel exports.

Volumes can easily be swapped out for Middle East-origin barrels, which are readily available, two of the trade sources said.

Senegal plans to start construction of a second oil refinery next year to boost domestic processing capacity, and is seeking $2 B–$5 B in investment for the scheme, the CEO of national refining company SAR said on Thursday.

The country has received financing offers from potential investors including China, Turkey and South Korea, Mamadou Abib Diop said on the sidelines of an African energy conference in Cape Town, South Africa.

Abib Diop said feedstock for the new plant would come mainly from Senegal's offshore Sangomar oil and gas field, operated by Woodside Energy with national oil company Petrosen a minority shareholder. The field started producing last year with annual output of 34.5 MMbbl, or some 4.6 MMt.

SAR, West Africa's oldest refinery, processes 1.5 MMtpy of crude oil (or around 30,000 bpd), but faces a domestic shortfall.

"This gap we will cover with a project named SAR 2.0, which means that we will add a second refinery site in order to add 4 MMtpy (of processing capacity)," Abib Diop said.

He said by a targeted 2029 production startup date, SAR wanted to achieve self-sufficiency in domestic supply of petroleum products, as well as potentially exporting to elsewhere in the region.

There is no final decision yet on where the new refinery will be located or if government would take an equity share in its development, Abib Diop said. "A lot of investors are coming and giving their interest about financing these projects," he added.

U.S. oil refiner Phillips 66 expects to book about $100 MM of charges to idle its 139,000-bpd Los Angeles-area refinery, which will cease operations by year-end, the company said on Wednesday.

These include around $70 MM to mitigate groundwater contamination, and about $30 MM for its midstream segment to retire transportation assets.

"Several process units have been placed in an idle state. The remaining units will be idled in a phased manner through the end of 2025," the Houston, Texas-based company said.

The refinery received its last waterborne crude on September 30. The final crude processing date is expected to be in mid-October.

Phillips 66 began winding down its Los Angeles refinery in September.

Fuel oil imports to the U.S. Gulf Coast surged to a two-and-a-half-year high in September, driven by a jump in cargoes from the Middle East, as refiners seek alternatives to dwindling Venezuelan crude supplies, according to preliminary ship tracking data, analysts and a refinery source.

U.S. Gulf Coast refiners are ramping up fuel oil imports to fill a widening gap left by declining heavy crude supplies, particularly from U.S.-sanctioned Venezuela.

Meanwhile, domestic fuel oil stocks have been in decline after the U.S. sanctioned Russian crude and oil products following its invasion of Ukraine in 2022, cutting off a key fuel oil supplier and forcing refiners to find alternative barrels.

Fuel oil imports into the U.S. Gulf Coast, home to more than 55% of total U.S. refining capacity, have been on the rise since July and were on track to reach 541,000 bpd last month, marking their highest since February 2023, according to Kpler.

In August and September, fuel oil imports from Gulf countries hit record highs, bolstered by volumes from Saudi Arabia, Iraq and Kuwait, per Kpler.

Shipping Iraqi high-sulfur fuel oil to the U.S. Gulf Coast on Suezmax tankers has been economically viable since early July, according to Sparta commodity owner Hoa Nguyen, referring to tankers that can ship up to a million barrels.

The end of the power generation season in the Middle East has also freed up more high-sulfur residual fuel oil barrels to meet strong demand on the U.S. Gulf Coast, Nguyen added.

"In short, there is way more availability of high-sulfur residuals right now, which the U.S. refining system is hungry for and which will help boost the diesel yield there," Nguyen said.

A drop in available crude supplies from Venezuela and more available fuel oil from the Mideast, coupled with strong product margins have led some U.S. Gulf Coast refiners to run more fuel oil in the last couple of months, according to a refinery source.

Gulf Coast refineries are designed to process heavy, sour crude, qualities typical of Latin American grades. When those supplies tighten, refiners can pivot to fuel oil, which secondary units can process into higher-value products like gasoline and diesel.

Crude imports to the refining hub have been in decline since July, falling 143,000 bpd on the month to just 880,000 bpd in September, according to preliminary Kpler data, their lowest since November 2022.

U.S. crude imports from Venezuela fell to 6,000 bpd in July, according to the U.S. Energy Information Administration (EIA), following the South American country's cancellation of cargoes to U.S. producer Chevron, ahead of a deadline set by the Trump administration to wind down oil transactions.

The Chevron authorization was reinstated with restrictions in late July but volumes have yet to recover, with weekly U.S. imports totaling just 49,000 bpd last week, compared with the 2025 high of 416,000 bpd in January, per EIA data.

"This has deprived U.S. Gulf refiners of precious heavy crude supplies, forcing them to turn to residual imports," said Roslan Khasawneh, senior oils analyst at Kpler.

Weekly U.S. residual fuel oil stocks fell 487,000 bbl last week to 20.63 MMbbl, compared with 29.2 MMbbl in the same week in 2021, prior to Russia's invasion of Ukraine, according to EIA data.

Berkshire Hathaway and Occidental announced a definitive agreement for Berkshire Hathaway to acquire Occidental’s chemical business, OxyChem, in an all-cash transaction for $9.7 billion, subject to customary purchase price adjustments. OxyChem is a global manufacturer of commodity chemicals vital to quality of life, with applications in water treatment, pharmaceuticals, healthcare and commercial and residential development.

“This transaction strengthens our financial position and catalyzes a significant resource opportunity we’ve been building in our oil and gas business for the last decade. I’m incredibly proud of the impressive work the team has done to create this strategic opportunity that will unlock 20+ years of low-cost resource runway and deliver meaningful near and long-term value,” said Vicki Hollub, President and Chief Executive Officer. “OxyChem has grown under Occidental into a well-run, safely operated business with best-in-class employees, and we are confident the business and those employees will continue to thrive under Berkshire Hathaway’s ownership.”

“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” said Greg Abel, Vice Chairman of Non-Insurance Operations at Berkshire. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire. We commend Vicki and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”

Transaction Details

Under the terms of the agreement, Occidental will sell OxyChem to Berkshire Hathaway for cash consideration of $9.7 billion, subject to customary purchase price adjustments. Occidental expects to use $6.5 billion of the transaction proceeds to reduce debt and achieve the target of principal debt below $15 billion set following the December 2023 announcement of its CrownRock acquisition. An Occidental subsidiary will retain OxyChem’s legacy environmental liabilities, and Glenn Springs Holdings Inc. will continue to manage existing remedial projects for that subsidiary. The transaction is expected to close in the fourth quarter of 2025, subject to regulatory approvals and other customary closing conditions.