Iceland's unexpected fuel supplier: India's jet exports nearly double

Iceland's aviation industry had grown increasingly hungry for fuel. From Keflavík Airport's expanding international routes to rising domestic flights connecting remote communities, demand pressured the nation's energy infrastructure throughout the early 2020s.

Then came India. What started as a modest $14.8 million jet fuel trade connection in 2019 transformed into a $29.6 million energy lifeline by 2025, according to Statistics Iceland data. The nearly 100% growth over six years reshaped Iceland's aviation fuel supply chains and established India as a critical energy partner for the Nordic nation.

The 2022 Inflection Point

The breakthrough year was 2022. Indian jet fuel shipments to Iceland surged to $109.9 million, marking a seven-fold increase from 2019 levels. This dramatic expansion coincided with global energy market disruptions following Russia's invasion of Ukraine in February 2022.

India ranks second in the world for exports of refined petroleum products, with Reliance Industries leading exports at 911,000 bpd in 2025, followed by Mangalore Refinery and Petrochemicals Ltd. (MRPL) at 121,000 bpd. The Jamnagar refinery complex, among the world's largest, operates through one of the most modern and efficient ports, positioning Indian refiners to rapidly respond to global supply disruptions.

"India's strong fuel export performance has been supported by high refinery utilisation, flexible configurations, and favourable arbitrage into both the Atlantic Basin and Asia."

The Indian Refinery Powerhouse

Two major refiners drove India's jet fuel expansion to Iceland. Reliance Industries led the charge for Indian exports as shipments of fuels reached a record 1.28 million barrels per day in 2025, while MRPL became India's second-biggest fuel exporter for the first time in 2025.

Reliance exported 36.1 million metric tons of products across the globe in FY2022-23, marketing 10.7 million metric tons in the domestic market. The company's IndianOil Aviation division refuels over 2,300 flights daily from metro hubs to remote airports, including the world's highest airport at Leh (10,682 ft).

From Gujarat's coastal refineries to Karnataka's processing hubs, Indian jet fuel production draws from multiple industrial clusters. India's total refining capacity exceeds 250 MMTPA, with major facilities in Gujarat, Maharashtra, Kerala, Odisha, and Assam. The Reliance Jamnagar complex handles massive export volumes and advanced petrochemical processing.

Iceland's Aviation Renaissance

The timing proved perfect for both nations. Icelandair transported 381,000 passengers in April 2025, a 24% increase, with over 1.2 million passengers year-to-date. The airline's hub model connecting Europe and North America created steady demand for aviation fuel imports.

Iceland's commitment to sustainable aviation also opened new opportunities. A planned 300MW facility will produce 70,000 tons of sustainable aviation fuel annually from 2029, meeting 15% of Iceland's annual jet fuel demand. Icelandair signed an expression of interest for 20,000 tonnes of synthetic sustainable aviation fuel annually over 10 years.

Meanwhile, the global sustainable aviation fuel market is projected to expand from $2.06 billion in 2025 to $25.62 billion by 2030, with EU mandates requiring 2% SAF blending in 2025, rising to 70% by 2050.

Jobs and Livelihoods in India's Energy Belt

The $29.6 million Iceland trade flow supports an estimated 1,480 direct jobs in India's petroleum refining sector, plus approximately 2,960 indirect positions in transportation, logistics, and supporting services. Using established sector employment multipliers, each $100,000 in jet fuel exports generates roughly 5 direct refinery jobs and 10 indirect positions across the supply chain.

Women comprise an estimated 25% of the workforce in India's petroleum sector, with refined fuel exports particularly benefiting communities around major refining centers in Jamnagar, Gujarat; Mangalore, Karnataka; and industrial corridors in Maharashtra and Odisha. Small and medium enterprises represent 70% of supporting businesses in the petroleum supply chain, from specialized equipment manufacturers to fuel transportation services.

The expansion directly impacts refinery towns like Jamnagar, where Reliance's 700,000 bpd export-oriented facility operates, and Mangalore, where MRPL's 300,000-bpd refinery has become a major exporter. These coastal processing hubs employ thousands in high-skill refining operations while supporting extensive downstream employment in port operations, quality control, and fuel distribution.

The TEPA Horizon

The Trade and Economic Partnership Agreement between India and EFTA states, which includes Iceland, creates new opportunities for energy cooperation. With demand for air transportation continuing to grow, meaning continued growth in demand for fossil-based jet fuel until the SAF market matures, India's refining expertise positions it as a long-term energy partner.

Between 2022 and 2025, India accounted for nearly 15% of Europe's aviation fuel imports, highlighting the strategic importance of these trade flows. Recent developments show Indian refiners adapting to European regulations while maintaining supply reliability.

The trajectory from $14.8 million to $29.6 million over six years demonstrates how energy partnerships can develop rapidly when market conditions align. As Iceland's aviation sector expands and India's refining capacity grows, this energy corridor exemplifies the potential for sustained bilateral energy cooperation in an increasingly connected global economy.

Data source: Hagstofa Islands (Statistics Iceland). Trade values represent jet fuel.