Left from Jamnagar Refinery of Reliance Industries
India has exported jet fuel to the US West Coast for the first time. This news is big because an energy rich country like America has to take India's help to meet the fuel shortage. Due to supply shortage in Los Angeles, India has got a rare business opportunity, which has been fulfilled by Reliance Industries' Jamnagar Refinery for energy company Chevron.
Last month, a fire at a major Chevron refinery in California halted production, sending jet fuel stocks on the US West Coast to their lowest level in three months. Taking advantage of this opportunity, India has made this historic export.
This entire matter is related to Chevron's huge refinery located in El Segundo, California. This refinery has a production capacity of approximately 2,85,000 barrels per day. After a fire here in October, the company had to close several units, which severely affected jet fuel production on the west coast. Chevron says that the repair work of the El Segundo unit will be completed only by the beginning of 2026. For this long period, fuel supply on the west coast is expected to remain tight.
According to trade sources and shipping data, about 60,000 metric tonnes (ie about 4,72,800 barrels) of aviation fuel was loaded onto a tanker named 'Hafnia Kallang' between October 28 and 29 from Jamnagar port operated by Reliance Industries. The ship has been chartered by Castleton Commodities and brokers estimate that it will reach Los Angeles in the first fortnight of December. The shipment was made when jet fuel prices on the US West Coast were up to $10 a barrel above Asia's benchmark FOB Singapore prices.
Although India has seized this opportunity, trade experts believe that it will not become a path for regular exports from India to America. The main reason behind this is shipping cost. Traders say that shipments from North-East Asia (like South Korea) are cheaper.
According to the data, the cost of shipping 40,000 metric tons of fuel from South Korea to the US West Coast is stable at around $40 per ton. This type of sea route between India and the US is less used, so spot shipping rates are not easily available. Also last month, jet fuel exports from North-East Asia to the US West Coast were at a five-month high (about 600,000 tonnes). This means that India's exports are the result of a 'rare' trade compulsion, and not a major change in the market.
