Surge in regional fuel trade reaffirms India’s role as Asia’s energy supplier
India’s diesel exports to Southeast Asia surged to a four-year high in May 2025, spotlighting its expanding influence in Asia’s energy market. With nearly 950,000 metric tonnes shipped—driven by record refining margins and increasing demand from countries like Vietnam, the Philippines, and Indonesia—India has emerged as a key fuel exporter and strategic energy partner in the region.
As traditional energy flows shift amid changing geopolitical and economic dynamics, India’s refining strength and geographic positioning make it a critical node in Southeast Asia’s energy security architecture. The trend reflects both commercial strategy and soft power diplomacy.
Background: How India became Southeast Asia’s fuel partner
India’s emergence as a regional fuel hub stems from decades of investment in one of the world’s most advanced refining networks. Facilities operated by Reliance Industries, Indian Oil Corporation, and Bharat Petroleum have transformed the country into a consistent exporter of petroleum products.
Since the 2010s, India’s refiners have targeted Southeast Asian markets—where rapid industrialization and urbanization have fueled rising energy demand. Countries like Vietnam and the Philippines, with expanding transport and power sectors, increasingly rely on Indian diesel to supplement local supply shortfalls.
This growing interdependence is also shaped by India’s agility. While China focuses inward to stabilize domestic energy supply, India offers flexible, competitively priced fuel exports—a trait appreciated by import-reliant ASEAN economies.
Strategic moves: Refining margins drive export surge
In May 2025, India exported 950,000 metric tonnes of diesel to Southeast Asia—the highest monthly volume since 2021. According to Kpler, this marks a 20% increase year-on-year, with Vietnam and the Philippines accounting for nearly 60% of shipments.
A key driver is India’s robust refining margins. With access to discounted Russian crude, Indian refiners have reported gross refining margins (GRMs) of over $13 per barrel, compared to $9 just a year earlier. These margins incentivize export-focused production, especially for high-demand products like diesel.
Regional demand dynamics also matter. Vietnam’s industrial rebound and power shortages prompted emergency fuel imports, while the Philippines saw diesel consumption spike amid infrastructure booms. Indian ports like Mundra, Jamnagar, and Mumbai have emerged as efficient export corridors for these flows.
Editorial insight: Diesel diplomacy and strategic energy influence
India’s expanding diesel trade is not just about commercial opportunity—it is also a geopolitical play. As ASEAN economies seek secure and cost-effective energy sources, India’s diesel supply strategy doubles as soft-power projection.
Indian oil majors are moving to deepen this influence. Reliance recently signed a multi-year supply agreement with Petrolimex (Vietnam), while Indian Oil is in talks with Pertamina (Indonesia) to set up a joint fuel terminal in Batam. These long-term alignments extend India’s economic reach and reinforce trust with key ASEAN partners.
At the policy level, India’s 2025 Integrated Energy Strategy now classifies refined fuels as “priority exports,” encouraging domestic refiners to target external markets for strategic returns. This marks a major evolution from India’s formerly consumption-focused energy policy.
Future outlook: Formalizing India-ASEAN energy corridors
If current trends persist, India’s diesel exports to Southeast Asia could exceed 10 million tonnes by year-end 2025. While monsoon season may cause a temporary dip, pent-up demand in countries like Indonesia and Malaysia is expected to sustain overall momentum.
Looking ahead, July’s ASEAN Energy Cooperation Forum in Kuala Lumpur could formalize frameworks for regional energy corridors—with India likely to play a central role. These agreements may enable faster customs processing, integrated logistics, and bilateral storage solutions, further boosting India’s exporter status.
India’s emphasis on low-sulphur fuels and green hydrogen-integrated refining also positions it as a future-ready supplier. As ASEAN countries tighten emission norms, India’s ability to align with sustainability mandates will enhance its long-term competitiveness.
Conclusion: India fuels Asia’s future
The May 2025 diesel export boom marks a new phase in Asia’s energy realignment—with India at the center. Far from being just an oil consumer, India has evolved into a strategic energy provider, shaping fuel flows across the region.
By combining cost advantages, geographic proximity, and policy foresight, India is redefining its role in the global energy order. For Southeast Asia, it’s no longer just about filling tankers—it’s about securing a trusted partner for a sustainable, interconnected energy future.
