Despite a rally in crude oil prices to three-year highs, there is scant evidence that demand in the top importing region of Asia is recovering. In fact, imports across the region dropped in September from the previous month, as high prices and economic disruption from the coronavirus pandemic continued to affect fuel demand.
What there is early evidence of is that the major producers in the OPEC+ group of exporters are re-gaining market share lost due to their earlier output cuts, as they ramp up production and cut their official selling prices.
Asia’s crude imports were 22.99 million barrels per day (bpd) in September, according to Refinitiv Oil Research, down from 23.24 million bpd in August and only just above July’s 22.61 million bpd.
China, the world’s biggest crude importer, brought in 9.6 million bpd last month, down from August’s 10.53 million bpd, according to Refinitiv’s vessel-tracking and port data.
The softness in September imports are most likely a reflection of the high official selling prices (OSPs) for Middle Eastern grades that prevailed at the time when September-arriving cargoes would have been arranged.
Also, a lack of available crude import and product export quotas may have constrained buying by China’s independent refiners, who account for about one-third of its oil demand.