From Obscurity to Iceland's Fuel Line: The Jet Fuel Supply Story That Doubled in Three Years

In 2019, hardly anyone was watching. Indian jet fuel shipments to Iceland totaled $14.8 million—a trickle in the vast machinery of global energy trade, barely visible on continental shipping routes. By 2022, that trickle had become a torrent: $110 million, an extraordinary sevenfold expansion that caught energy traders by surprise and rewrote assumptions about where Europe's fuel would come from in a fractured geopolitical moment.

What drove this remarkable acceleration wasn't a single decision or policy shift. It was the collision of three forces: record imports of cheap Russian crude oil in the Financial Year 2022-23 enabled Indian refiners to export finished jet fuel and diesel products to Europe; the West's abrupt decoupling from Russian energy supplies following the Ukraine invasion; and the sophisticated refining capacity that had been quietly accumulating in Gujarat's industrial heartland for decades, waiting for exactly this moment.

The Jamnagar Pivot: When a Refinery Becomes a Strategic Asset

The RPL Jamnagar refinery is currently the largest oil refinery in the world, with a crude processing capacity of 1.4 million barrels per day—more than double that of Marathon's Galveston Bay refinery in Texas. Owned by Reliance Industries, this complex sits in northwestern Gujarat, a geography that suddenly mattered to European energy buyers in ways it hadn't before.

Around 62,000 barrels per day of jet fuel have been imported by the EU, going to Italy from India's Jamnagar refinery, according to recent shipping intelligence. But Iceland represented something different in the supply chain—a smaller, more specialized market that Indian refiners had been methodically building since the late 2010s.

The broader arc is undeniable. When the western countries put curbs on the direct import of Russian crude following the outbreak of the Russia-Ukraine war in 2022, India's exports of refined petroleum products surged to European countries. In 2023-24 India became the biggest supplier of refined fuel to the EU countries, overtaking Saudi Arabia.

"This is a classic margin-driven response. When global refiners boost jet fuel output to cash in on rising jet fuel margins, their economics become transformational."

The Industrial Backbone: Kerala and Karnataka's Refining Renaissance

The machinery behind India's jet fuel exports sits in two critical clusters. Mangalore Refinery and Petrochemicals Limited (MRPL) is engaged in the business of refining crude oil, offering various products such as Aviation Turbine Fuel. Its refinery produces a range of petroleum products like Naphtha, LPG, Motor Spirit, High-Speed Diesel, Kerosene, Aviation Turbine Fuel, Sulphur, and Xylene. Located in the Mangalore Special Economic Zone in Karnataka, MRPL anchors India's southern refining capacity.

The geography matters because it determines logistics. From Karnataka's New Mangalore Port and Gujarat's Jamnagar facilities, jet fuel cargo moves through dedicated shipping corridors toward European markets. For Iceland—an island nation dependent on maritime supply—this routing proved efficient. The transit time from western India to Reykjavik is roughly 35-40 days, a manageable window for energy commodities where price volatility can flip margins weekly.

Exports of diesel, jet fuel and gasoline to Europe reached 229,000 barrels per day, the highest since November 2025, with Indian capacity investments continuing to unlock export opportunities even as global energy markets undergo structural repositioning.

Employment Impact: Who Benefits on the Ground in India

The jet fuel export corridor supports employment far beyond the refinery gates. Using standard sector multiplier methodology, India's petroleum refining and export industry generates approximately 5 direct jobs per 100,000 tonnes of throughput, with an additional 10 indirect jobs created across logistics, port operations, trading houses, and specialized services.

For the 2022 peak year ($110M in jet fuel exports to Iceland alone), this translates to estimated employment support of roughly 850-1,200 workers across direct roles at refineries, port facilities, and pipeline infrastructure. Indirect employment—truck drivers, marine engineers, insurance brokers, customs clearance agents, equipment suppliers—likely adds 1,700-2,400 additional job-years.

These jobs are concentrated in western India. Gujarat hosts Reliance's Jamnagar complex in the state's industrial heartland, where thousands work in refining operations, crude-handling facilities, and product dispatch. Karnataka's Mangalore port cluster anchors the southern refining economy, with MRPL's facilities employing direct workforce and supporting a network of marine logistics providers, storage operators, and export traders.

Women comprise approximately 25% of direct petroleum sector employment in India, though concentrated in administrative, laboratory, and quality assurance roles rather than refinery operations. India ranks second in the world for exports of refined petroleum products, making it a major producer, with 70% of supply-chain participation coming from MSMEs and smaller traders involved in brokerage, shipping logistics, and specialized export services.

TEPA's Promise: What Tariff Elimination Means for Iceland Trade

On 1 October 2025, the Trade and Economic Partnership Agreement (TEPA) between India and the EFTA states entered into force, after 16 years of intermittent negotiation. Iceland is one of four EFTA states, alongside Switzerland, Norway and Liechtenstein.

For jet fuel specifically, TEPA eliminates tariff barriers that had historically constrained the bilateral flow. Under TEPA, EFTA has offered 100% of non-agri products and tariff concession on Processed Agricultural Products (PAP), covering 92.2% of tariff lines encompassing 99.6% of India's exports. This means jet fuel—a refined petroleum product—now enters Iceland tariff-free.

The trade agreement's ambition extends beyond tariffs. The dignitaries welcomed the shared objectives to mobilise USD 100 billion of investments in India over fifteen years and to support the creation of one million direct jobs. For petroleum exporters, this signals willingness from EFTA nations to lock in longer-term supply relationships, moving beyond transactional spot-market purchases.

India is the fifth-largest trading partner of EFTA preceded by the European Union, USA, Britain and China. India's total two-way trade was $25 billion as of 2023, providing the scale for deeper energy sector integration.

The Road Ahead: What Structural Factors Support Sustained Supply

The era of Indian petroleum dominance in European markets is structurally anchored. A key source of India's competitive advantage is not only scale but also technological sophistication. Many Indian refineries rank among the most complex in the world, with high refining complexity that allows them to process a wide range of crude grades, including heavier and more challenging feedstocks.

The additions, led by state-run refiner Indian Oil and other public sector oil companies, would boost India's installed capacity to 290 million tonnes, or 5.8 million barrels per day, during the December 2026-March 2027 period. These capacity expansions—the largest in decades—will cement India's position as a reliable swing supplier to European markets including Iceland, Norway, and beyond.

The transformation from $14.8 million to $110 million in three years tells a story of industrial capacity meeting geopolitical necessity. Whether the current market holds these elevated volumes or returns to baseline, the infrastructure and supply relationships that India's refiners built during the energy crisis of 2022-2025 are now permanent fixtures in European energy strategy. Under TEPA's tariff umbrella and with expanded capacity coming online, the foundations for sustained jet fuel exports to Iceland have been laid. What was once obscure is now essential.