Jet fuel nearly doubles as India becomes Iceland's energy pivot

From Arctic outposts to Indian refineries, jet fuel flows forge a growing Nordic energy corridor—cementing Iceland's reliance on Reliance Industries as aviation demand surges.

How India Became Iceland's Jet Fuel Provider

Jet fuel exports from India to Iceland have more than doubled since 2019, reaching $29.6 million in the first eight months of 2025, according to official data from Hagstofa Islands (Statistics Iceland). The trajectory reveals a remarkable shift: in 2019, the Nordic island nation received just $14.8 million in jet fuel shipments. By 2022, that figure had exploded to $109.9 million—a 642% increase in just three years.

The story behind these numbers reflects a fundamental restructuring of Iceland's energy supply chain. A decade of aviation growth, driven by expanding tourism and regional connectivity, combined with the 2024 signing of the Trade and Economic Partnership Agreement (TEPA) between EFTA States including Iceland and India, has repositioned India's petroleum sector as critical infrastructure for Nordic energy security. For the coke and refined petroleum industry in India, which expanded to approximately 258.1 million metric tonnes per annum (MMTPA) by 2025, Iceland represents a newly accessible niche market—one where reliable supply chains and competitive pricing matter more than ever.

IndianOil Aviation Service is a leading aviation fuel solution provider in India and the most-preferred supplier of jet fuel to major international and domestic airlines. But the company's strategic exports to Iceland tell a more complex story about how India's massive refining infrastructure now powers growth corridors stretching across the Atlantic.

The 2022 Inflection Point

The explosion in 2022 wasn't accidental. That year marked a confluence of three forces: recovery from COVID-era aviation shutdowns, India's refining capacity reaching 258.1 MMTPA as of FY25, and Reliance Industries' Jamnagar refinery—comprising a 660,000 barrel-per-day domestic unit and a 580,000 bpd export-oriented Special Economic Zone facility—operating at peak efficiency to capture European demand.

The SEZ refinery's output moves directly to international markets, with Europe and the United States among the primary destinations. For Iceland specifically, jet fuel arrived via the Sikka Port and Vadinar terminal on the Arabian Sea coast, with logistics handling both Russian Urals crude and feedstock from the Middle East and West Africa.

The Jamnagar complex produces petroleum products including gasoline, naphtha, jet fuel, diesel, and petroleum coke, giving Reliance Industries the flexibility to respond to Iceland's seasonal demand spikes. When krill fishing vessels and tourism flights converged on Reykjavik's airspace in summer months, Indian jet fuel was there—refined at a complex with a Nelson Complexity Index of about 21.1, measuring the refinery's ability to convert lower-value crude feedstocks into high-value products such as diesel and jet fuel.

TEPA Opens the Arctic Gate

The trade agreement was signed on 10 March 2024 and entered into force on 1 October 2025. For jet fuel specifically, tariff access mattered. While EFTA offered zero or reduced tariffs on more than 95% of India's exports, including 100% of non-agricultural products, petroleum products benefit from preferential duty treatment that incentivizes higher-volume flows.

The impact on Iceland's import bill was immediate. Under TEPA, duties on refined petroleum products entered at lower rates or were phased out, making Indian jet fuel price-competitive against traditional suppliers. Iceland's traditional fuel suppliers included Norway, Kuwait, the United States, Denmark and Colombia—but India's scale and refining expertise now offered a sixth pillar of supply security.

"Iceland's growing demand for jet fuel sparks expanding trade partnership with India's refining sector, opening new commerce routes."

Employment and Livelihoods Across India's Refining Belt

Behind each dollar of jet fuel exports sits a sprawling network of Indian workers and communities. India's oil refining sector features 23 operational refineries as of 2025, collectively providing 258.1 million metric tonnes per annum capacity, positioning the country as the second-largest refiner in Asia and fourth globally. The coke and refined petroleum products industry, which handles jet fuel production and export logistics, supports an estimated 855,435 workers in India across multiple states, according to production context data.

Using standard sector multipliers for refining operations, every 100,000 tonnes of jet fuel exports to Iceland supports approximately 5 direct jobs in refinery operations and 10 indirect jobs in logistics, warehousing, port handling, and shipping support. For Iceland's 2025 jet fuel imports averaging roughly 120,000 tonnes annually (based on $29.6M value and typical market pricing), this translates to an estimated 600 direct jobs and 1,200 indirect positions across India's refining and supply-chain ecosystem.

The workforce reflects India's diverse geography. India's refining capacity exceeds 250 MMTPA with major facilities located along the west and east coasts, especially in Gujarat, Maharashtra, Kerala, Odisha, and Assam, with more than 23 operating refineries. Gujarat—home to Jamnagar district, where Reliance's manufacturing division spreads across 7,500 acres—forms the spine of export-oriented jet fuel production. Women comprise approximately 25% of the refining workforce overall, though technical and operations roles remain male-dominated. MSMEs account for roughly 70% of the supply-chain services feeding the large refineries—trucking, equipment maintenance, spare parts fabrication—creating a multiplier effect through smaller towns and industrial clusters across Maharashtra and Gujarat.

Beyond Jamnagar, Indian Oil Corporation Limited (IOCL) operates nine refineries totaling around 81 MMTPA, with other major producers including Bharat Petroleum Corporation Limited (BPCL) at approximately 35 MMTPA and Hindustan Petroleum Corporation Limited (HPCL) at about 28 MMTPA. Each facility processes crude into jet fuel destined for export markets, including Iceland, generating wages, tax revenue, and procurement demand that ripples through regional economies.

Competitive Positioning and the Road Ahead

Iceland's shift toward Indian jet fuel reflects a broader calculus of supply reliability and cost. With Reliance processing discounted Russian Urals crude and re-exporting refined product to markets that cannot accept Russian-origin crude directly, Indian refiners operate a margin-driven export model that favors smaller buyers like Iceland. Unlike Kuwait or the United States, which manage their own refining capacity, Iceland depends on imports—and India's scale now makes it a natural supplier.

EFTA's offer encompasses 92.2% of tariff lines, equivalent to 99.6% of India's exports, including complete coverage of non-agricultural products. This preferential access stabilizes the price advantage Indian refiners enjoy. For Reykjavik's aviation sector—servicing international carriers like Icelandair and Iceland's geothermal energy-dependent domestic infrastructure—reliable fuel supply at competitive rates supports both profitability and sustainability goals.

Looking forward, the government aims to expand refining capacity to 450 MMTPA by 2030 to position India as a leading global refining hub. Iceland will likely deepen its dependence on this capacity. As aviation traffic recovers and expands, and as tourism continues to rebuild post-pandemic, demand for jet fuel into Reykjavik will continue rising. Iceland's aviation fuel import trend saw a gradual increase over the past five years, driven by growing demand from the aviation industry, influenced by factors such as fluctuations in global oil prices and changes in airline operations.

The story from 2019 to 2025 is one of infrastructure meeting opportunity. India's refiners—anchored by Reliance Industries and IOCL—built the capacity. TEPA opened the tariff gate. And Iceland, with its growing appetite for reliable energy, became a proof point that India's refining sector can serve not just Asia, but the Arctic, too.