Indian refineries are currently operating at their highest capacity levels in history, between 105% and 108%. This capacity increase has occurred due to unprecedented demand for diesel and ongoing tensions in global fuel markets, especially in the Middle East.
Increase in Refinery Capacity
Over the past six months, refineries in India, as the third-largest crude oil importer in the world, have consistently operated at capacities above 105%. Nandakumar Pila, the manager of Mangalore Refinery and Petrochemicals Limited (MRPL), announced at the APPEC oil conference in Singapore that this situation has persisted since the onset of the war in Ukraine.
Read more: Greg Stanton sells $1.79 million of his common stock
MRPL, which has a processing capacity of 300,000 barrels per day on the coasts of Karnataka, has high flexibility in processing various types of crude oil due to its complex design and secondary processing units. Pila emphasized that the company's refineries will continue to operate at over 100% capacity until March 2027.
Global Impacts on the Diesel Market
Currently, all Indian refineries are prioritizing diesel production, which has negatively impacted jet fuel production. This decision was made due to the severe diesel demand in the domestic market and supply shortages in global markets. Diesel prices have surged globally, and price spreads have reached their highest levels. Supply shortages in the Middle East and Russia, on one hand, and maximum refinery production in other regions cannot compensate for the supply shortages caused by the recent wars between the United States and Iran and Ukraine's drone attacks on Russian refineries.
With the intensification of the crisis in the Middle East and Russia's diesel export ban, the price spreads have reached their highest levels last week. Analysts believe that diesel and other fuels serve as the real test of the oil market, not crude oil.
Read more: Millord Mining secures $25 million in financing to expand Utah facilities · Houthis target Saudi objectives once again
