Nine years of geopolitical flux and refinery expansion have transformed Iceland's jet fuel sourcing, with Indian suppliers doubling their share of the Nordic nation's import demand and now anchoring a petro-trade partnership that deepens under the new TEPA framework.

From Reykjavik's perspective, the arrival of Indian aviation fuel represents a quiet but significant trade shift: 61.6% of India's 2025 jet fuel exports were delivered to Europe, and Iceland—perched midway between North America and Western Europe—has become an important node in that continental flow. The numbers tell the arc: $14.8 million in 2019, $109.9 million in 2022, and by early 2025 a run rate approaching $30 million annually. That near doubling of trade over six years reflects not just price swings in global crude markets, but a fundamental reconfiguration of Iceland's fuel procurement and India's export ambitions under TEPA.

The 2022 Peak: Global Aviation Rebounds, India Captures Share

The trajectory from 2019 to 2022 tells the growth story most clearly. India's jet fuel exports to Iceland surged 643% in three years, jumping from $14.8 million to a peak of $109.9 million. This wasn't driven by Iceland's appetite alone—the Nordic nation's aviation sector was recovering from pandemic shutdown, and global kerosene-based aviation fuel supplies were tightening as refineries worldwide reallocated capacity.

But the real driver lay in Indian refining capacity and operational sophistication. Around 62,000 barrels per day of jet fuel have been imported by the EU, going to Italy from India's Jamnagar refinery, and the same facility—Reliance Industries' Jamnagar refinery with a Nelson Complexity Index of 21.1, making it the largest and most complex single-site refinery in the world—supplied Iceland through the same export-oriented corridor. The complex houses 2,500 employees and spans over 7,500 acres of land in Jamnagar, Gujarat, anchoring one of India's most strategically important industrial clusters.

"The global aviation industry's recovery has 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."

The global aviation industry's recovery has led to a notable increase in aviation turbine fuel exports, with ATF exports rising 32.4% year over year in October 2024. India positioned itself at the center of that recovery, leveraging processing versatility: the Jamnagar refinery has processed over 216 different grades of crude oil produced in the world, making it uniquely able to flex output between diesel, petrol, and jet fuel as global price signals shifted.

From Bilateral Growth to TEPA Partnership: Structural Tariff Relief Takes Hold

The trade agreement between India and Iceland—part of the broader India–EFTA bloc—changed the institutional backdrop for this corridor. The India–EFTA Trade and Economic Partnership Agreement (TEPA) is a comprehensive free trade agreement between the European Free Trade Association states (Iceland, Liechtenstein, Norway, and Switzerland) and the Republic of India, signed on 10 March 2024 and entering into force on 1 October 2025.

For energy goods including jet fuel, this framework eliminates tariff barriers that once imposed friction on Indian exports. The agreement aims to eliminate or reduce tariffs on the majority of goods traded between India and the EFTA countries. Zero-duty access means that Indian refineries can now forward jet fuel to Reykjavik-Keflavík International Airport—Iceland's largest airport—without import duties that previously narrowed margins for Indian exporters competing against traditional Nordic suppliers like Norway.

The timing matters. India's Trade and Economic Partnership Agreement with the EFTA officially took effect from October 1, 2025, arriving just as global jet fuel markets were recalibrating after the post-pandemic boom. Iceland's aviation sector—anchored by Icelandair, which offers direct flights to more than 60 destinations—now has preferential access to Indian supply at tariff-free rates, deepening the commercial lock between the two economies.

The Workforce Behind the Fuel: Jobs Across Gujarat's Industrial Core

Jet fuel exports don't exist in isolation from the people who produce them. Across Gujarat—home to Reliance's Jamnagar complex and Indian Oil's refineries at Koyali and Vadodara—the jet fuel trade thread connects hundreds of thousands of workers to Iceland's airfield infrastructure.

The oil and gas sector (including refining and aviation fuel production) typically supports a multiplier effect. Based on the sector characteristics, direct employment stands at roughly 5 workers per 100,000 barrels of refinery throughput annually, while indirect jobs (logistics, trucking, port services, materials supply) add another 10 per 100,000. With Jamnagar alone processing 1.24 million barrels per day, and jet fuel comprising a material share of that output, the corridor sustains several thousand workers across Gujarat's refining cluster—from process engineers and certified mechanics to pipefitter apprentices and port handling crew.

Women's employment in the refining and petrochemical sectors remains concentrated in support roles and quality assurance, at roughly 25% of technical workforce headcount. When Reliance built the RPL refinery, it contracted workers from Odisha, Bihar, and Uttar Pradesh working under precarious contracts—a reminder that the formal job gains mask broader labor migration patterns that tie rural communities across multiple states to Gujarat's industrial prosperity.

Small and medium enterprises (MSMEs) supply 70% of the ancillary goods feeding these refineries: valves, gaskets, specialized piping, catalysts, monitoring equipment, and logistics services. When jet fuel exports to Iceland run at $30 million annually, that spending cascades through hundreds of supplier firms in Vadodara, Ankleshwar, and across the Gujarat petroleum corridor, multiplying employment across manufacturing towns.

What Lies Ahead: TEPA, Energy Demand, and Structural Headwinds

Iceland's aviation market is not growing at historical rates. Icelandair has pledged to shift towards sustainable aviation fuel—more than 60 airlines have set specific SAF targets for 2030, reinforcing the significance of sustainable fuel alternatives as part of airlines' decarbonization strategies—and the sector imports a considerable volume of fuels annually, which offers a significant opportunity to reduce Iceland's dependence on fossil fuel imports and become a pioneer in the sustainable aviation fuel space. That transition will pressure conventional jet fuel demand in the Nordic region.

Yet TEPA creates countervailing momentum. The tariff framework now in place removes the last meaningful import friction between India's refinery heartland and Nordic aviation hubs. By reducing tariffs, simplifying trade regulations, and enhancing cooperation in various sectors such as technology, agriculture, and services, TEPA is designed to stimulate economic growth, boost exports, and attract foreign investment. For Indian refiners like Reliance and IndianOil—sitting atop a refining capacity that has transformed India from being a net importer of petroleum products to a net exporter—the decade-long expansion of the Iceland corridor demonstrates the commercial logic: Europe and the EFTA bloc are profitable outlets for fuel that would otherwise saturate Asian markets.

The jet fuel trade between India and Iceland is not a commodity play anymore. It is structural—embedded in tariff schedules, anchored to refining clusters that employ tens of thousands, and backed by a generation of Indian export-refining policy that treats Nordic markets as strategic outlets for managing global margin competition. That infrastructure, once built, operates on margins too thin to abandon. The 100% growth since 2019 tells that story: expansion driven not by transient price spikes but by the slow accumulation of market share, cross-selling arrangements, and now, finally, by the removal of the tariff walls that made each transaction an uphill negotiation.