India doubles diesel and jet fuel export duties as Hormuz tensions tighten global markets
The policy adjustment aims to stabilise domestic supply and manage global market tightness exacerbated by renewed disruptions in the Strait of Hormuz and refinery outages in Russia.
India has nearly doubled export duties on diesel and jet fuel for the fortnight commencing 16 July 2026, raising levies to 15.50 rupees and 14.5 rupees per liter respectively. The Finance Ministry stated the move responds to tightening global fuel markets caused by renewed disruption in the Strait of Hormuz. While duties on gasoline exports were lowered, analysts warn the increased taxes on diesel and jet fuel may curb Indian exports, exacerbating tight global stocks amid refinery disruptions in Russia.
The levy on diesel exports was raised to 15.50 rupees per liter, up from 8.5 rupees, while jet fuel export taxes increased to 14.5 rupees per liter from 7.5 rupees. Conversely, the export duty on gasoline was reduced to 2.5 rupees per liter, down from 4 rupees. These rates take effect for the period of 16 to 31 July 2026, following India’s standard fortnightly review cycle designed to align with domestic and international market conditions.
Current levies remain significantly lower than those imposed during the early weeks of the Iran war, when taxes were three to four times higher. The policy shift coincides with a period of heightened geopolitical tension, including an interim peace deal between the US and Iran aimed at reopening the Strait of Hormuz, which was announced alongside the SpaceX IPO in June 2026.
Analysts note that refined product stress is currently higher than crude oil stress, with diesel, gasoil, and jet fuel commanding strong premiums due to low inventories and refinery disruptions. Ole Hansen, Head of Commodity Strategy at Saxo Bank, highlighted that while Brent crude futures have flipped to backwardation as Middle East supply risks return, the real strain is on refined products.
The global diesel market is exceptionally tight, partly due to a Russian ban on exports following Ukraine’s drone attacks on Russian refining capacity. The increased taxes on Indian exports are expected to further constrain supply in a market already grappling with these structural deficits and peak seasonal demand.
