Whalesbook
India has successfully exported its first-ever cargo of jet fuel to the United States West Coast for energy major Chevron. The shipment, originating from Reliance Industries' refinery in Jamnagar, was sent to fill supply gaps in Los Angeles caused by a fire at Chevron's El Segundo refinery. This marks a significant step in India's energy export capabilities.
India has made its first-ever export of jet fuel to the United States West Coast, with energy major Chevron being the recipient. Approximately 60,000 metric tonnes (472,800 barrels) of aviation fuel were loaded onto the Panamax tanker Hafnia Kallang from Reliance Industries' Jamnagar refinery between October 28 and 29. This shipment was prompted by supply shortfalls on the US West Coast, specifically in Los Angeles, following a fire at Chevron's 2,85,000 barrel-per-day El Segundo refinery in southern California. The fire forced the company to take multiple units offline, and repairs are expected to be completed in early 2026. Castleton Commodities chartered the ship, which is anticipated to arrive in Los Angeles in the first half of December.
While this export addresses immediate needs, traders suggest that frequent imports from India to the US West Coast might be less common compared to shipments from Northeast Asia, which are generally cheaper. Northeast Asia's exports to the US West coast reached a five-month high in October. However, the arbitrage economics remain healthy due to higher US West Coast jet fuel prices. US West Coast jet fuel stocks are currently at a three-month low.
Impact
This development showcases India's growing refining capacity and its ability to capitalize on international market dynamics and arbitrage opportunities. It could lead to increased opportunities for Indian energy companies in global markets. The US West Coast supply situation remains tight until the refinery repairs are completed. Rating: 8/10
Difficult Terms:
Jet Fuel: A type of aviation fuel designed for use in aircraft powered by gas-turbine engines.
Arbitrage Opportunity: A situation where there is a price difference for the same asset in different markets, allowing for a risk-free profit by buying in one market and selling in another.
Refinery: An industrial plant where crude oil is processed and refined into more useful products such as gasoline, diesel fuel, and jet fuel.
Panamax Tanker: A type of oil tanker that is designed to be the maximum size that can pass through the Panama Canal.
Free on Board (FOB): A shipping term that indicates the point at which the seller is no longer responsible for the goods; the buyer assumes responsibility and costs from that point forward.
Spot Price: The price of a commodity for immediate delivery.
