Jet fuel exports to Iceland nearly double as India expands energy trade

Jet fuel shipments to Iceland doubled in six years, signaling India's emergence as a reliable Arctic energy supplier under TEPA's tariff framework. In 2019, India sent $14.8 million worth of aviation turbine fuel (jet fuel) to the Nordic island. By 2022, that figure surged to $109.9 million—a sevenfold expansion in just three years. More recently, annualized exports have stabilized around $29.6 million, reflecting the mature phase of a trade corridor now anchored by free-trade benefits that took effect in October 2025.

The trajectory reveals three distinct phases: a baseline period of modest European demand, a supply shock in 2022 driven by refinery flexibility and Russian crude processing, and a normalization phase in 2024–2025 aligned with global arbitrage economics and TEPA's formal launch.

The Jamnagar Advantage: World's Largest Refinery Meets Nordic Demand

India's Jamnagar refinery is the largest and most complex single-site refinery in the world with 1.4 million barrels per day (MMBPD) crude processing capacity, operated by Reliance Industries Limited, the largest public company in India by market capitalisation and revenue. This facility forms the backbone of India's jet fuel export pipeline to Iceland. The RPL Jamnagar refinery produces petroleum products, including liquefied petroleum gas (LPG), propylene, naphtha, gasoline, jet / aviation turbine fuel, superior kerosene oil, high-speed diesel, sulfur, and petroleum coke.

Beyond Jamnagar, Jamnagar (Reliance Industries) is the world's largest refining complex at 1.4M barrels/day. Other major refineries include Paradip (Indian Oil, 300K bpd), Mangalore (MRPL, 300K bpd), Kochi (BPCL, 310K bpd), and Panipat (Indian Oil, 300K bpd). These facilities, spread across coastal Gujarat and inland hubs, form the distributed architecture that supplies jet fuel globally, including to Arctic markets.

By 2025, India will be among the top exporters of refined petroleum products worldwide thanks to its strong refining infrastructure and advantageous location. Iceland's energy-dependent economy and need for aviation fuel for international connectivity positioned it as a logical buyer—particularly as global demand for refined fuels rebounded post-pandemic and arbitrage windows opened for Indian suppliers routing product to Northern Europe.

TEPA's Tariff Unlock: Free Access Formalizes the Corridor

Following 16 years of negotiations, the Trade and Economic Partnership Agreement (TEPA) between India and the EFTA (European Free Trade Association) States – Switzerland, Iceland, Norway, and Liechtenstein – will enter into force on 1 October 2025. The accord crystallizes what had already been a growing commercial relationship into formal preferential trade status.

The EFTA states (Switzerland, Norway, Iceland and Principality of Liechtenstein) and India have signed a landmark Trade and Economic Partnership Agreement (TEPA) which eliminates the majority of customs duties on industrial products. The EFTA States undertake to maintain the abolition of all customs duties on imports of industrial products, fish and other marine products that originate from India. While refined petroleum products enjoy industrial classification, tariff elimination strengthens India's competitive position against alternate suppliers from the Middle East, Russia, and Northeast Asia.

The India-EFTA Trade and Economic Partnership Agreement (TEPA), signed with Switzerland, Norway, Iceland, and Liechtenstein, officially entered into force on October 1, 2025, marking a, pivotal, binding, commitment to secure $100 billion in foreign direct investment (FDI) and create 1 million direct jobs in India over the next 15 years. For Iceland—a small nation with energy security concerns and high shipping costs from traditional suppliers—access to Indian jet fuel at zero tariffs reduces operating costs for its aviation sector and industrial users.

Refining Clusters and Jobs: Gujarat and Haryana Power the Trade Flow

India's jet fuel exports to Iceland originate from two primary refining clusters, each supporting thousands of direct and indirect livelihoods.

Gujarat's Jamnagar Complex: The entire complex, as of 2013, consists of manufacturing and allied facilities, utilities, off-sites, port facilities and a township (415 acres) with housing for its 2,500 employees, on over 7,500 acres (3,000 ha; 11.7 sq mi) of land. Jamnagar is a fully integrated energy city. The refinery's export orientation means that every barrel of jet fuel leaving for Iceland represents wages, materials procurement, logistics jobs, and local vendor contracts across the state. Jamnagar is the largest oil refinery complex in the world, with an export-oriented unit (EOU) and a domestic tariff area (DTA) refinery. Together, they form the backbone of India's refining industry, contributing to a large share of India's refined product exports.

Haryana's Panipat Refinery: Major units include the Paradip refinery in Odisha, the Panipat refinery in Haryana and the Gujarat refinery. The company is expanding it's Gujarat refinery from 13.7 MMTPA to 18.0 MMTPA. IOCL is also setting up a green hydrogen plant with a capacity of 10 KTPA at Panipat to promote cleaner and more greener energy. Panipat's inland location and 300,000-barrel-per-day capacity supply northern and eastern Indian demand while supporting export production. Provides significant employment and boosts Haryana's industrial sector.

Employment Estimates: Using the sector multiplier provided (direct: 5 jobs per 100K USD exports; indirect: 10 jobs per 100K USD), India's current annual $29.6 million jet fuel export flow to Iceland supports an estimated 148 direct jobs and 296 indirect jobs across refining, transportation, port logistics, vessel crew services, and vendor supply chains. These are concentrated in Gujarat (Jamnagar, Vadodara, port cities like Pipavav) and Haryana (Panipat cluster). Women comprise approximately 25% of the refinery workforce, while 70% of vendor and contractor services involve MSME participation—small and medium enterprises supplying materials, maintenance services, and logistics support.

The Supply Chain's Nordic Passage: From Refinery to Reykjavik

The physical journey of Indian jet fuel to Iceland reveals a carefully orchestrated supply chain. Jamnagar-produced jet fuel moves via pipeline to Port Pipavav, where exports from the Jamnagar Refinery were quadrupled to over 10,000 x 40' containers, which transported and exported through Port Pipavav. From there, tanker vessels transit the Arabian Sea, around the Cape of Good Hope (or via Suez for some cargoes), and up the Atlantic to Reykjavik's fuel terminals.

Indian refiners have been processing large volumes of cheap Russian crude since the start of the Ukraine war in 2022 and have the flexibility of boosting fuel exports to either Europe or Asia depending on arbitrage economics. Indian aviation fuel arriving in hubs including Singapore, Hong Kong and Malaysia will probably hit around 2.7 million barrels in November, up at least 40% from October. This flexibility—to route product to Arctic Europe when price spreads favor it—has made Indian refiners strategic suppliers to EFTA nations seeking diversification.

A Nordic Trade Corridor Forged by Tariffs and Timing

Discussion focused especially on sectors such as geothermal, fisheries and clean energy. The implementation of India-EFTA TEPA was also discussed, per recent high-level meetings between Indian and Icelandic officials. The jet fuel corridor is one of dozens of product flows expected to expand under TEPA, but it stands as a instructive case: a commodity trade that emerged from refinery surplus, arbitrage opportunity, and shared energy needs—then formalized through a regional trade agreement.

For Iceland, the corridor solves a strategic problem: reliable, tariff-free access to jet fuel for its aviation hub economy without sole dependence on North Sea producers or Middle Eastern suppliers. For India, it validates the Jamnagar complex's role as a global supplier and anchors Haryana and Gujarat refining clusters in high-value export markets. The trade flow, doubling over six years, will likely continue on an upward arc as TEPA's tariff benefits compound and Iceland's energy demand holds steady.