European Diesel Market Watches Closely as Cyclone Biparjoy Disrupts Supply Chain

Gujarat, India: Cyclone Biparjoy is set to make landfall in Gujarat which will have a massive impact on both the infrastructure as well as the economy, with wind gusts reaching a maximum speed of 150 Kilometer per hour, wind gusts of this speed expected to disrupt the supply chain. As a precautionary measure ports around the Kutch coast have been shut down anticipating extensive damage. Along with the closure of ports around 74,000 people living along the coast have been evacuated.

This cyclone has not only impacted the working of the common people but also of the industries operating around the region, World’s Largest refining complex which is situated in Jamnagar and operated by Reliance Industries has halted its shipping of diesel and the other oil product in lieu of this Cyclone. After the European sanctions on Russia, Europe became more dependent on Asian imports to meet its fuel demand. Thus, with a production capacity of 704,000 barrels of oil per day through Sikka port in Gujrat, Reliance Industries played a major part in exporting diesel to Europe but due to unfavorable weather conditions the exports from the Sikka port have been curtailed.

Indian exports of Aviation Turbine Fuel have also been curtailed due to this weather situation as the operations of the major ports in the west namely Kandla, Mundra, and Pipavav have been disrupted due to this cyclone situation. Indian exports of diesel and other oil products became important due to France’s refinery worker’s strike which has forced the country to import more oil to meet their country’s energy requirement. Imports in India have also taken a hit as India’s home of coal import, Mundra Port, which is also the world’s largest mechanized coal import terminal with a handling capacity of 60 million tonnes per annum has suspended its vessel operations.

Apart from export and imports if we look at the other end of the supply chain i.e., the production side, it has also taken a backstep, 50 crew members of a jack-up oil rig operated by Vedanta Ltd has been evacuated from Okha, Gujarat by the coast guard due to rough weather and high seas due to Cyclonic weather. The initial challenge after a cyclone comes in the form of infrastructural damage with disrupted infrastructure and crippled industries business activities slow down and it takes time and money to get the supply chain back on track which is not favorable for the economic growth of the nation.