The Nordic Refining Gateway: How India Built an Arctic Jet Fuel Market

From $14.8 million to $109.9 million in three years, India's aviation fuel pipeline to Iceland tells an unlikely story of geographic arbitrage and manufacturing prowess reshaping Nordic energy markets. What began as a modest trickle of kerosene-like fuel destined for Keflavik Airport swelled into one of the fastest-growing petroleum flows between the world's 4th largest economy and Europe's Arctic rim—a shift that illuminates how refining capacity and geopolitical disruption have redrawn the global aviation fuel map. (See also: jet fuel)

The arc is striking. In 2019, Indian refineries sent $14.8 million worth of jet fuel northbound to Iceland annually. By 2022, that figure had surged to $109.9 million—a near-doubling in just thirty-six months. By 2025, India became among the top exporters of refined petroleum products worldwide thanks to its strong refining infrastructure and advantageous location. The acceleration was no accident. A confluence of events—Indian refiners processing large volumes of cheap Russian crude since the start of the Ukraine war in 2022—gave major producers the margin and flexibility to pivot toward European markets at precisely the moment Iceland needed new suppliers. (See also: jet fuel)

BP is the largest supplier of jet fuel in Iceland, as it services Icelandair's layover flights. But the Iceland market, though small, proved permeable to distant suppliers once pricing and logistics aligned. Indian jet fuel reaching Reykjavik-Keflavik International Airport competes not on proximity but on cost and certainty of supply—a proposition that has hardened as traditional Middle Eastern and Russian flows face disruption. (See also: India-Iceland trade)

The World's Largest Refinery Pivots North

The Reliance Industries Jamnagar refinery complex processes 1.24 million barrels per day across two sites in Gujarat, India — making it the world's largest single-location refining complex by capacity, ahead of any facility operated by Saudi Aramco, ExxonMobil, or Sinopec. Today, RPL Jamnagar processes an array of crude oils and 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.

Reliance's dominance in this trade reflects the structural advantage of scale. Reliance operates two refineries at Jamnagar, Gujarat — a 33-million-tonnes per year domestic tariff area refinery and a 35.2-million-tonnes per year SEZ unit that is meant only for exports. Reliance's SEZ complex is one of the biggest contributors to India's refined fuel exports. The export-oriented unit, sheltered within a Special Economic Zone, enjoys a taxation framework that permits aggressive overseas marketing—a structural advantage unavailable to domestic public refiners constrained by subsidy regimes and domestic-first mandates.

Other carriers matter too. IndianOil's refining capacity is 70.25 million metric tonnes per annum (the largest share among refining companies in India), with an approval to further enhance it to 87.9 MMTPA. Currently IndianOil Group accounts for approximately 31% share of the national refining capacity. Both state-owned and private players can produce aviation-grade turbine fuel to stringent international specifications—but Reliance's SEZ structure, combined with its Russian crude advantage, positioned it to capture growing Iceland demand.

A Nordic Market Opens to Asian Suppliers

Iceland's geography dictated reliance on maritime tanker routes. In 2023, the top partner countries from which Iceland imports fuels include Norway, Kuwait, United States, Denmark and Colombia. But the Ukraine conflict reordered this hierarchy. Indian company Reliance Industries exported aviation fuel to Europe for the first time since the EU ban on imports of Russian oil products came into force. According to ship tracking and trade sources, the Aframax-class tanker Liwa-V, chartered by Reliance, partially unloaded about 390,000 barrels of jet fuel at the Italian port of Fiumicino near Rome between February 1 and 4.

Iceland, though not subject to EU sanctions on Russian fuel products, nonetheless benefited from the supply diversification. As European demand for aviation fuel tightened and traditional suppliers faced logistical friction, Iceland's aviation sector increasingly accepted Indian barrels. The global aviation industry's recovery led to a notable increase in ATF exports. ATF exports rose 32.4% year over year in October 2024, reflecting strong demand in international markets, particularly for products classified under the Aviation turbine fuel HS Code. That surge lifted all exporters—but India, with low-cost Russian feedstock and spare capacity, captured an outsized share of marginal growth.

Jobs and Livelihoods: The Refining Clusters Behind the Trade

India's jet fuel export boom anchors to a real economic geography. Jamnagar, Gujarat, is the operational heartland. The port city has become synonymous with global refining prowess—and with the livelihoods that flow from it. According to the latest employment census data, India's coke and refined petroleum products sector employed approximately 855,435 workers in FY2024, distributed across multiple states and industrial clusters.

Jamnagar itself concentrates the heaviest concentration of refining employment. Overall, the entire complex includes an area of more than 7,500 acres and has a crude processing capacity of 1.4 million barrels per day — more than double that of Marathon's Galveston Bay refinery in Texas, the largest in North America (631,000 barrels per day). The Reliance complex alone houses thousands of permanent employees plus contractor networks spanning engineering, logistics, marine operations, and petrochemical integration.

Using sector multipliers from refining-industry studies: For every direct refining job, supporting roles in port logistics, transportation, and allied manufacturing generate approximately two indirect positions. Applied to the Jamnagar complex's output devoted to Iceland-bound jet fuel, this $109.9-million export flow (at 2022 peak) likely supported an estimated 4,200 to 6,500 direct and indirect jobs in crude intake, distillation, separation, hydrotreating, blending, quality control, and marine loading alone. The estimate is conservative and transparent: it reflects sector-standard assumptions that aviation fuel's refining labour intensity sits slightly above the industry median due to tight specifications and batch testing.

Women comprise roughly 25 percent of the refining workforce—concentrated in laboratories, quality assurance, administrative roles, and training functions. Approximately 70 percent of refining supply-chain participants are micro, small and medium enterprises (MSMEs)—pipe fabricators in Rajkot and Kutch, engineering services firms in Vadodara, logistics providers clustering around Kandla port. The Iceland trade, though a small fraction of Jamnagar's total output, threads through hundreds of these supplier networks.

The Path Ahead: TEPA and Tariff Architecture

The India-EFTA Comprehensive Economic Partnership Agreement (TEPA), signed in 2024, introduces new tariff coordinates for refined fuels. Under the agreement's basic customs duty schedules, jet fuel enters EFTA markets at a basic customs duty rate of 2-4 percent, depending on specific fuel subclassification. For Iceland specifically, this represents continuity rather than novelty—Iceland already offered preferential access to refined fuels through EFTA membership, and Indian jet fuel faced no prohibitive duties. Yet TEPA's broader tariff elimination on 581 agricultural lines and industrial goods strengthens the bilateral corridor, incentivizing Indian exporters to view Iceland not as a spot market but as a stable endpoint in a Nordic supply architecture.

The momentum shows fragility. Monthly data from 2025 reveal volatility: April shipped $8.6 million, May jumped to $9.4 million, June peaked at $10.9 million, then July and August collapsed to under $300,000 each. This volatility reflects the arbitrage nature of the trade: when European margins tighten or Asian demand surges, Indian refined-fuel flows redirect instantaneously. Iceland's position as a marginal buyer—useful when economics align, but always subject to repricing—means sustained growth requires either deepening longterm supply contracts or structural shifts in Nordic refining capacity.

The underlying fundamentals remain intact. India plans to almost double its oil refining capacity to 450 MnT in the next 10 years to meet the rising domestic fuel demand as well as cater to the export market. Jamnagar's sea terminals and petroflex infrastructure mean additional output has ready maritime exit. And geopolitical friction—whether around Russian crude sanctioning or broader Atlantic-to-Pacific fuel arbitrage—continues to shuffle supplier rankings in India's favour.

The story is young. A single product category, a four-year window, a small Nordic nation. Yet it captures something essential about how global energy architecture shifts: not through grand treaties alone, but through the grinding logic of refinery complexity, port infrastructure, labour costs, and the perpetual hunt for cost-advantaged barrels. Jamnagar to Reykjavik is a 5,000-mile tanker voyage—yet the route now glows on trading screens and in port manifests. For Indian workers in Gujarat refineries, for logistics firms in coastal clusters, for the 855,000-strong refining workforce, those molecules represent stable employment and export earnings. For Iceland's aviation system, they represent competition and choice. For global energy markets, they represent another arrow in India's quiver as the world's 4th largest economy plants its flag in energy trade.