Cost of sending diesel from India to Europe increases as international trade is affected due to Houthi attack

Diesel shipments from India to Europe this month fell to their lowest since 2022. Houthi attacks on merchant shipping continue to impact international trade. Amidst the turmoil in the Red Sea, it has become better to ship goods east rather than west. Due to this, the flow of goods to the EU and Britain has reduced considerably.

Fuel arrivals from Europe to India averaged 18,000 barrels a day in the first two weeks of February, more than 90% below the January average, according to Vortex Ltd. data compiled by Bloomberg. Sparta Commodities analyst James Noel-Beswick said the decline in diesel shipments was largely due to rising shipping costs in the West.

Noel-Beswick said that in the past the economics of exporting to Singapore have been very good compared to countries in the West. Tankers bound for Europe or the Atlantic Basin must cross South Africa's Cape of Good Hope to avoid the Houthi threat, increasing the length and cost of the journey. For this reason the number of shipments has decreased.

According to statistics, there were no imports of diesel-type fuel into the EU in the first two weeks of February, and only one shipment to Britain. However, the Marlin Sicily and Marlin La Plata recently loaded barrels in India and headed for Rotterdam, according to port reports and tanker-tracking data compiled by Bloomberg.