India’s Diesel Supply to Europe Decreases by 90% Leading to Negative Impact on Business and Supply Chain Operations in India

Shipping charges for cargo going from Asia to the European Union (EU) and Britain have increased.

India’s Business, Supply Chain: Diesel supply from India to Europe decreased by 90%: Shipping charges increased due to Houthi attacks in the Red Sea, now delivery is being done in Asian countries.

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Diesel supply from India to Europe has reached its lowest level in the last two years. According to the Bloomberg report, international trade is being seriously affected due to the continuous attacks by Houthis in the Red Sea.

Shipping charges for cargo going from Asia to the European Union (EU) and Britain have increased. In such a situation, it has become more economical to send goods to Asia instead of the Western countries. Bloomberg quoted Vortexa Limited’s data as saying, “In the first two weeks of February, about 18 thousand barrels of diesel reached Europe every day from India. This is about 90% less than the average delivery in January.”

Ships Passing Through South Africa Due To Fear Of Houthi Attacks

Sparta Commodities analyst James Noel-Beswick said, “Exports to eastern countries like Singapore have become much better than Western countries. Tankers heading towards Europe or the Atlantic Basin have to pass through South Africa’s Cape of Good Hope due to fear of the Houthis.

This has increased the distance, which has a direct impact on the cost. Also, many times they have to take the Suez Canal route, where the insurance charges are also high given the risk of corrosion. Due to all these reasons the shipping charges are increasing.

Diesel Did Not Reach Any EU Country From India In February

According to the data, only 1 shipment of diesel reached Britain in February. There was no supply in the EU. However, recently barrels have been loaded from India in two ships named Marlin Sicily and Marlin La Plata, which will reach Rotterdam, Netherlands by the end of this month.

On the other hand, an increase has been recorded in the number of diesel cargo arriving from India to Asian countries in February. Some of these shipments also reached Bangladesh and Saudi Arabia. Goods loaded on ships like Peace Victoria and Orange Victoria are being delivered to East Asia.

80% Of India’s Trade Is Through Sea Route

Between 12% and 30% of global trade and container traffic pass through the Suez Canal in the Red Sea each year. International trade on the main route between Europe and Asia is facing problems due to attacks by Houthi rebels.

80% of India’s trade happens through sea route. At the same time, 90% of the fuel also comes by sea route. Attacks on maritime routes have a direct impact on India’s business. There is a danger of the supply chain getting spoiled due to this.