India's Reliance Industries has chartered a medium-range vessel to carry diesel from India to Singapore in December, a rare move for the refiner that typically uses larger vessels for the route, traders said on Friday.
Medium range vessels can carry about 35,000 to 40,000 tonnes of diesel. Reliance usually ships diesel to Singapore in long-range 2 sized vessels, or Aframaxes, that can carry about 80,000 to 100,000 tonnes of fuel, or in a long-range 1 sized vessel, or Panamaxes, that can carry about 50,000 to 60,000 tonnes.
As much as possible, Reliance ships diesel to Europe or Africa when arbitrage economics are viable and moves the fuel to Singapore only when demand in Europe is weak, traders said.
"It is not economical in terms of freight costs to move the cargo in a smaller ship to Singapore, compared with moving larger volumes to the west from India," a shipbroker said.
It is unclear if Reliance plans to store the oil product in Singapore or sell it directly to a customer in the region.
India shipped about 94,000 tonnes of diesel to Singapore in the week to Dec. 3, data from International Enterprise shows.
Reliance, controlled by billionaire Mukesh Ambani, operates the world's biggest refining complex in India's western state of Gujarat, where its two adjacent plants can process about 1.4 million barrels per day of oil.
In the past, it has sold diesel to countries like Australia, which is Asia's top diesel importer and where import demand is growing due to closures of its ageing refineries, traders said.