Industrial goods reshape India-Iceland trade corridor

$29.9 million worth of jet fuel and mineral oils flowed from India to Iceland in 2025—a trade stream worth scrutinizing not just for the volume, but for what it reveals about how Indian refiners are repositioning themselves as Europe's new energy supplier, and how a refining industry spanning three states is feeding a global aviation and industrial boom.

A sector built on refining prowess

India is the world's fourth-largest refiner with 5.8M barrels/day capacity. Mineral and petroleum products represent India's second-largest export category at $85B+ annually, with refining capacity exceeding domestic demand and creating surpluses for export markets like Iceland and elsewhere across the Arctic Circle.

The Iceland export figure breaks down starkly: jet fuel dominates at approximately $29.6 million of the $30M total, with petroleum jelly and aircraft fuel purchased overseas making up the remainder. This is not a diversified product mix—it is a sector focused on aviation turbine fuel (ATF) and kerosene-type products where IndianOil is the only oil company in India to market the widest possible range of fuels used by the aviation industry in India.

The competitive field and India's second-place standing

Iceland's mineral and petroleum market tells a clear story of competition and consolidation. Data from Iceland's customs authority shows top buyers include Singapore, UAE, Netherlands, USA, Malaysia, Australia, and African nations—but Iceland now ranks among the smaller yet meaningful corridors. India holds 18.1% of Iceland's imports in this sector, second only to Denmark (which supplies 30.8%), followed by Colombia (11%), and France (8%).

That positioning matters. Europe is increasingly turning out to be the brightest market for Indian oil products exporters, with refineries in India ramping up exports to Europe and the Mediterranean since Europe and the UK banned Russian diesel in 2023. Iceland, though small in absolute terms, represents a beachhead in a Nordic corridor that matters. ATF exports rose 32.4% year over year in October 2024, reflecting strong demand in international markets—the exact product that India is shipping to Reykjavik and beyond.

The refinery clusters powering the export

The Jamnagar refinery complex operated by Reliance Industries is the world's largest, processing 1.4 million barrels per day. This single facility, located in Gujarat, accounts for a disproportionate share of India's jet fuel exports. During the first nine months of 2024, exports to the EU from the Jamnagar, Vadinar, and new Mangalore refineries in India jumped by 58% compared to the same period of 2023.

Indian Oil's network of refineries across Gujarat, UP, and West Bengal supply both domestic and export markets. Beyond Reliance's Jamnagar flagship, other major refineries include Paradip (Indian Oil, 300K bpd), Mangalore (MRPL, 300K bpd), Kochi (BPCL, 310K bpd), and Panipat (Indian Oil, 300K bpd). This geographic spread—from Gujarat's west coast, through Uttar Pradesh inland, to West Bengal in the east—creates a national supply infrastructure that serves both domestic consumption and export corridors.

Reliance Industries Limited (NSE: RELIANCE), Indian Oil Corporation (NSE: IOC), Bharat Petroleum (NSE: BPCL), and Hindustan Petroleum (NSE: HPCL) are the four pillars anchoring this sector. Indian oil companies such as Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum have established trading offices in Europe to facilitate exports, and have formed partnerships with European firms to distribute their products in the region.

Jobs and livelihoods across the refining heartlands

The petroleum refining sector, though capital-intensive, sustains employment across exploration, refining, distribution, and logistics. This industry provides direct and indirect employment to millions, spanning exploration, refining, distribution, and retail sectors.

Based on sector multipliers provided for oil and gas refining (5 direct jobs and 10 indirect jobs per 100,000 USD of exports), the $29.9 million Iceland corridor alone supports an estimated 15 direct jobs and 30 indirect jobs within the Indian refining supply chain. Scale that across the full $85 billion petroleum export portfolio, and the sector sustains roughly 42,500 direct jobs and 85,000 indirect jobs in refining, transportation, and allied services.

These jobs cluster in Gujarat (home to Reliance's Jamnagar complex and other facilities), Uttar Pradesh (Panipat and Kanpur refineries), and West Bengal (Barauni and Haldia), with secondary hubs in Karnataka (Mangalore) and Kerala (Kochi). Women comprise approximately 25% of the direct refining workforce, with higher participation rates in distribution, retail, and ancillary sectors.

The Indian refining industry is also heavily reliant on MSME suppliers—70% of the sector's value chain involves small and medium enterprises providing equipment maintenance, logistics, specialized chemicals, storage solutions, and technical services. A single jet fuel shipment to Iceland triggers demand across multiple MSMEs: storage tank operators in Gujarat, marine logistics firms in Mumbai, inspection and certification companies, and trade finance providers.

The growth trajectory and Arctic positioning

IndianOil's milestone achievement of indigenous AV Gas 100 LL production at Koyali refinery in Gujarat aligns with the 'Atma Nirbhar Bharat' initiative, and the company further expanded its horizons by exporting AVGAS 100 LL to distant countries, reinforcing its commitment to global energy leadership.

For Iceland specifically, the lack of a prior-year baseline in customs data suggests this is either a new corridor or one that has recently achieved scale. Iceland's total petroleum imports reached $165.8 million in 2025 across all suppliers; India's $29.9 million represents a meaningful consolidation of supply, placing Indian exporters just 18 percentage points below the Nordic nation's top source (Denmark).

Jet fuel shipments from India to Europe hit a year's high of 126,000 b/d in May in 2024, demonstrating volatility but also underlying strength in demand. For a small island nation like Iceland dependent on imported fuel for aviation and power generation, Indian jet fuel offers price competitiveness and reliable supply—particularly as India, which continues to import large amounts of discounted Russian oil, has become the leading exporter of refined fuels to Europe.

The Arctic corridor—Iceland, Norway, Nordic ports—represents a frontier market where Indian refining capacity is not yet dominant but is clearly expanding. The $29.9 million to Iceland sits within a broader European footprint that saw India's petroleum product exports grow to $20.5 billion in 2023-2024—a nearly 250 percent increase from 2018-19 levels.

A sector positioned for sustained export growth

India imports crude oil and adds value through refining, exporting products to markets across Asia, Africa, Europe, and the Americas. This arbitrage strategy—importing crude at discount prices, refining to world-class specifications, and exporting finished products—is structural, not cyclical. By 2025, India's total oil refining capacity increased to approximately 258.1 million metric tonnes per annum (MMTPA), with major refiners such as Indian Oil Corporation, Reliance Industries and Nayara Energy expanding their refining and petrochemical integration projects to increase exports of petroleum products and strengthen India's position in the global refining market.

Iceland's appetite for Indian jet fuel is likely to persist as European aviation demand remains strong post-pandemic and as Arctic routes (including those serving Icelandic operations) become more trafficked. For India's refining sector, small Nordic markets like Iceland signal something larger: the successful repositioning of Indian capacity from domestic fuel supplier to global exporter, with particular strength in the fuels—jet kerosene, diesel, naphtha—that industrial economies depend on most.

Zovora.ai Trade Intelligence | Data source: Hagstofa Islands (Statistics Iceland), 2025