LAUNCESTON, Australia- Crude oil demand in Asia, the world’s top importing region, is showing renewed signs of life, with October imports expected to be the highest in seven months and back to pre-pandemic levels.
The region’s crude imports this month are estimated at 24.98 million barrels per day (bpd) by Refinitiv Oil Research, which will be the most since March and also exceed the pre-coronavirus level of 24.53 million bpd from October 2019, as well as the pandemic-affected 23.45 million bpd from October 2020.
October’s arrivals are up a strong 1.81 million bpd from September’s 23.17 million bpd.
But the robust gain in Asia’s imports this month masks a continuing weak picture for China, the world’s top oil buyer.
China’s imports are estimated at 9.79 million bpd for October, down a touch from official customs figures for September of 10.03 million bpd and below the 10.53 million bpd for August.
China’s crude oil demand continues to be affected by a broader energy shortage, which has seen the world’s second-biggest economy implement production cuts and power rationing in energy-intensive industries such as steel and aluminum.
Oil refining has also suffered, with daily throughput dropping to 13.64 million bpd in September, the lowest since May 2020, with independent refiners unable to source crude as import quotas became exhausted and product demand affected by weakness in downstream users.
While more import quotas were issued on Oct. 15, the total for 2021 for independent refiners will be below those for last year, the first time quotas have been lowered on an annual basis since the system was implemented in 2015.
It’s also worth noting that there is now a narrow window for refiners to arrange cargoes for delivery prior to the end of December, which has seen an upsurge of interest in buying Russian ESPO crude, given its considerably shorter transit time from the eastern port of Kozmino to China compared to shipping times from the Middle East.
The revival in Asia’s crude demand has been led by India, Japan and South Korea, with the three biggest importers in the region after China all recording solid gains in October imports.
India is expected to land 4.19 million bpd in October, up from September’s 3.88 million, as the South Asian nation starts to revive its economy after ongoing coronavirus outbreaks had led to lockdowns.
Japan’s October imports are forecast at 3.01 million bpd, which would be the highest this year as the country builds up products ahead of the northern winter demand peak.
