Explained: How the West Asia war is creating a diesel problem for India

India’s fuel supply challenge is deepening as the ongoing West Asia war disrupts nearly 45% of the country’s oil imports, but the bigger concern lies not just in replacing lost volumes, but in securing the right kind of crude to meet its diesel-heavy demand.

Refiners are actively scouting for alternative sources, yet crude oil is not a uniform commodity. Different grades yield varying proportions of fuels when processed, with some producing more petrol and others more diesel. This distinction is critical for India, where diesel accounts for around 40% of total fuel consumption and underpins transport, agriculture and industry.

Indian refineries have been optimised over time to process crude from the Gulf, which is better suited to maximise diesel output. Supplies from key West Asian producers typically align with these configurations, delivering higher diesel yields that match domestic consumption patterns.

The disruption of these supplies has forced refiners to evaluate alternatives that may not be an ideal fit. Crude from the United States is largely lighter in composition, resulting in higher petrol output and lower diesel production, making it less suitable for India’s needs. African crude presents its own challenges, either being too light and skewed towards petrol or containing higher sulphur levels that complicate refining and reduce efficiency.

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Russian crude has emerged as the closest substitute in terms of quality. Grades such as Urals share similarities with Gulf crude and are more compatible with Indian refinery configurations, allowing for relatively better diesel yields compared to other alternatives.

However, the core risk persists. Even if India succeeds in replacing the disrupted import volumes, the mismatch in crude quality could constrain diesel production. This creates the possibility of tighter diesel availability in the months ahead, highlighting that the current challenge is as much about the nature of supply as it is about its scale.