India finds new gasoil buyers in Africa, Latin America amid sanctions risk

India is shifting growing volumes of its gasoil to Africa and South America as incoming EU sanctions have threatened to sever trade links into the bloc.

India helped redraw the global oil trade in 2022 when the EU suspended most of its Russian crude and products imports, creating a supply vacuum for its diesel. At the same time, Indian refineries emerged as opportunistic buyers for Russian crude, which is now processed in large volumes and sent back to Europe.

It was a deliberate policy loophole designed to avoid shutting off Russian supply and causing global price spikes. However, in July 2025, the EU announced a major policy overhaul, pledging to ban imports of fuel made from Russian crude. It also sanctioned India's Russian-owned Vadinar refinery, a major 400,000 b/d facility, and has promised further clampdowns on third-country buyers under its 19th sanctions package.

The major policy change promises to redraw global oil flows again -- either by forcing India to shift its crude purchases or to find new buyers for its products. Despite recent assurances to US President Donald Trump over private commitments by the Indian government, officials have so far stayed defiant over their purchases of Russian oil.

The country is quickly diversifying its refining exports, according to S&P Global Commodities at Sea data, in a potential sign of things to come once sanctions are enforced in January 2026.

New outlets

India exported some 210,000 b/d of diesel/ gasoil to Brazil in September, hitting highest since January 2022 and jumping threefold from August levels, according to CAS figures. India's market share for Brazilian gasoil imports shot up from 10% in August to 75% in October.

Growing cargo volumes have also shifted to the West and East African markets, which have recently relied on Russia and the Middle East for the bulk of their supply.

In August, India exported almost 170,000 b/d of diesel/gasoil into West Africa, an all-time high. In October, it shipped some 160,000 b/d to East African markets, another all-time record.

"India is coming into the African market in a big way," said one refined products trader focused on the West African market who was not authorized to speak publicly.

William Oneil, an S&P Global Commodity Insights oil analyst, said Brazil could present a viable long-term outlet for rerouted Indian diesel, calling continued Russian imports the most likely option once sanctions are enacted.

"It's also certainly possible that they redirect volumes to blending/storage hubs like Fujairah," he said. "The viability of this seems to depend on how stringently the EU enforces the letter of the sanctions text."

African market share

The change accelerates a recent shift in Indian diesel flows, which has gradually pivoted toward Africa in recent years.

Europe has accounted for a dwindling share of Indian export volumes on an annual basis, according to CAS data, from a peak of 36% in 2023. In 2024, Northwest Europe and the Mediterranean made up around 30% of Indian export volumes, while the share has dropped to just 19% in 2025 to date.

Meanwhile, the share of exports into Africa has increased. In 2023 the share was 29%, while in 2025 it has totaled almost 40%.

Pricing signals in West Africa have kept arbitrage opportunities attractive for India's gasoil producers. Platts, part of S&P Global Commodity Insights, assessed the low sulfur diesel STS Lome price at $661/mt Oct. 21, reflecting an $18/mt premium to the ICE LSGO assessment used as a European benchmark.

In recent months, a booming African trade has coincided with falling Russian exports, which have sharply contracted after intensive Ukrainian drone strikes on most of the country's major refining facilities.

Sanctions risk

The export reshuffle has kept markets guessing over how trade flows will settle after the imposition of the EU import ban, which hinges on country-level strategies for India, China and Turkey and enforcement efforts.

After months of speculation over how measures would be enforced, the EU released new guidelines on its policies on Oct. 16, putting the burden on importers to demonstrate the origin of their crude.

Refineries that want to export product to Europe will be expected to provide evidence of segregation between Russian oil and alternative crude streams, or to demonstrate that no Russian crude has been processed for at least 60 days.

Fuel EU partner countries and net crude exporters will be exempted from guarantees of origin requirements, but traders have nevertheless expressed lasting uncertainty over how measures will be policed.

India imported about 58.2 million barrels of crude originating from Russia in the 30 days to Oct. 21, representing 36% of India's total crude intake, according to CAS data.