The UK allowed imports of jet fuel and diesel refined from Russian crude in third countries, opening a key outlet for Indian exporters, Kpler said in a Thursday analysis.
The UK's Department for Business and Trade introduced General Trade License GBSAN0004 on May 20, removing sanctions restrictions on fuel refined from Russian crude feedstock outside Russia, according to Kpler.
The move gives Indian and Chinese refiners that use Urals and ESPO crude easier access to the UK fuel market, as Britain's refining capacity has declined and domestic diesel and jet fuel supplies have tightened.
Indian refiners led by Reliance Industries could benefit most after sanctions disrupted jet fuel exports made from Russian crude, with Kpler estimating jet and kerosene demand losses at 30,000 barrels per day this month and 55,000 b/d in June.
The policy change follows a recent 30-day waiver from the Office of Foreign Assets Control that allowed Indian refiners to continue buying discounted Russian crude cargoes, Kpler said.
India also lowered its aviation turbine fuel export levy to 16 rupees ($0.16) per liter, or about $26 per barrel, from 33 rupees per liter, or roughly $54/bbl, improving margins for jet fuel exporters, according to Kpler.
Shell Haven, Britain's largest aviation fuel terminal, can handle tankers up to 135,000 deadweight tons and allows Indian suppliers to move LR2 jet cargoes directly into the UKOP pipeline network serving Heathrow and Gatwick airports, Kpler said.
Kpler also identified Oikos and Milford Haven as alternative import terminals, although both sites operate on a smaller scale and require additional maintenance work.
Diesel markets may see a smaller impact because Britain's distribution network mainly handles smaller cargoes and lacks enough deep-water terminals for large LR2 deliveries, according to Kpler.
Kpler said weaker Atlantic medium-range tanker rates continue dragging down diesel delivery costs into Europe as US Gulf Coast cargoes dominate regional supply flows.