Asia is set to import record levels of crude oil in February 2024, with volumes expected to reach as high as 28.51 million barrels per day (bpd). This surge in imports is driven by major importers ramping up purchases amid increased refining activity and evolving geopolitical dynamics. Data compiled by commodity analysts Kpler and cited by Reuters indicates that February’s imports will surpass the 27.48 million bpd recorded in December 2023 and the 26.22 million bpd in January 2024.
China and India Lead Import Surge
The significant increase in crude oil imports for February is primarily attributed to China and India, the largest and third-largest oil importers globally. As these countries navigate differing sourcing strategies, their import patterns are diverging sharply. China’s strategy includes boosting imports from both Russia and Saudi Arabia, capitalizing on substantial discounts for Russian oil and reduced prices from the Kingdom.
China’s imports from Russia are projected to exceed 2 million bpd this month, reaching between 2.07 million and 2.08 million bpd, according to data from Vortexa and Kpler. In contrast, India’s approach involves reducing its purchases of Russian crude in response to U.S. pressure, while increasing imports from the Middle East, West Africa, and the Americas.
Shifting Market Dynamics
As the market evolves, the dynamics of oil pricing have shifted notably. Saudi Arabia has recently cut its official selling prices (OSPs) for Asia to the lowest levels compared to regional benchmarks in over five years. This move has intensified demand for Saudi oil among Chinese refiners. India’s imports from Saudi Arabia are also on the rise, with estimates indicating an increase to 1.03 million bpd in February, up from 774,000 bpd in January. This marks the highest volume of imports from Saudi Arabia since November 2019.
The contrasting strategies of China and India underscore the complexities of the current global oil market, where geopolitical considerations are heavily influencing supply chains. As these two major players adjust their sourcing tactics, their actions will likely have significant implications for global oil prices and supply stability in the months ahead.
With February poised to set a record for crude oil imports in Asia, the market will continue to watch closely how these dynamics unfold and the potential effects on the broader energy landscape.
