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Asia’s first half crude oil imports decline, undermines bullish forecasts
Asia’s imports of crude oil ticked lower in the first half of 2024 from the same period last year, defying expectations that the top-consuming continent would lead global demand growth.
Asia imported 27.16 million barrels per day (bpd) of crude in the January to June period, down a modest 130,000 bpd from the 27.29 million bpd in the same period in 2023, according to data compiled by LSEG Oil Research.
The slightly weaker outcome was largely a result of lower arrivals in China, the world’s biggest oil importer, with gains by Asia’s number two buyer India not enough to offset China’s softness.
The lack of growth in Asia’s imports of crude oil in the first half goes some way to undermining the 2024 demand forecasts from major industry groups such as the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC). Of course, imports are only one component of overall demand, others including domestic oil production and changes in inventory levels.
But in Asia, imports are the key driver of demand given the region’s reliance on oil arriving in tankers, or via pipelines from Russia and central Asia in the case of China. For the demand forecasts made by the IEA and OPEC, it’s certain that Asia’s imports are going to have to be strong in the second half, especially those for China.
OPEC’s June monthly oil market report forecast that China’s oil demand would grow by 720,000 bpd in 2024 over 2023, while the IEA is expecting an expansion of 500,000 bpd. However, China’s imports were about 11.08 million bpd in the first half, a figure calculated by using official customs data for the first five months and LSEG’s forecast for June.
This is down 300,000 bpd from the customs number of 11.38 million bpd for the first six months of 2023. With China’s imports looking weak, it’s worth looking at whether domestic output is making up the difference.
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