Crude oil imports into Asia this month are expected to rise by 8.6% on the month as refineries in China and India exit maintenance season, Reuters’ Clyde Russell reported today, citing data from Refinitiv.
The rebound follows a decline in Asian crude imports in April when the total dropped to the lowest in seven months. The numbers sparked concern about the outlook for oil demand as Chinese economic indicators also suggested a less smooth than expected post-pandemic recovery.
Yet it seems the biggest reason for the decline was refinery maintenance, based on the strong rebound expected for this month when Refinitiv estimates total Asian imports would hit 27.73 million barrels of oil daily.
For China specifically, the data service provider expects oil inflows at a rate of 11.96 million barrels daily, up by as much as a million barrels daily from April. Imports from Russia are seen hitting 2 million barrels daily, up from 1.74 million bpd last month.
Almost the same amount of Russian crude is seen going to India this month, at 1.97 million bpd. Imports from Saudi Arabia, the subcontinent’s second-largest supplier are seen falling to 570,000 bpd from 690,000 bpd in April, and so are imports from Iraq—India’s number-three supplier.
Meanwhile, Reuters’ Russell notes that India’s future fuel exports may be under threat as EU officials get uncomfortable that the fuels EU countries buy from India are probably produced from Russian crude.
Just how serious this threat is, however, is yet to be seen because there are not a lot of alternative suppliers of the amounts of fuel the EU still consumes despite its green push.
China’s fuel exports are also set for a decline, but for a different reason: the exhaustion of the first batch of export quotas for the year. Russell noted that a further rebound in local demand will also lead to lower exports.