Asia’s imports of crude oil rebounded in August as heavyweight buyers China and India bought more crude from top exporters in the Middle East.
The world’s top importing region saw arrivals of 27.18 million barrels per day (bpd) in August, up from 24.91 million bpd in July and also above the 26.39 million bpd from the same month in 2024, according to data compiled by LSEG Oil Research.
While the 2.27 million bpd increase from July looks strong, it’s worth noting that July was the weakest month for Asia’s imports for a year, and August’s arrivals were slightly weaker than the 27.98 million bpd LSEG tracked in June.
The question for the market is whether the recovery in August imports is a sign of strengthening demand in Asia, or if there are other factors at work.
Taking a step back from the month-to-month volatility shows Asia’s imports of crude oil are tracking modestly higher so far in 2025.
For the January to August period imports were 27.02 million bpd, which is 510,000 bpd higher than the 26.51 million bpd for 2024 as a whole.
This increase appears to be weaker than the forecasts for oil demand growth made by the Organization of the Petroleum Exporting Countries (OPEC) in its August monthly report.
OPEC forecast that Asia’s oil demand growth will be 710,000 bpd in 2025, led by an increase of 200,000 bpd in China, the world’s biggest crude importer, and of 220,000 bpd in India, Asia’s second-biggest importer.
PRICE MOVES
The problem is that both of these countries are price-sensitive buyers, meaning that when crude prices drop they tend to buy more, but trim imports when they rise.
August-arriving cargoes would largely have been bought in a window from May to mid-June, a time when oil prices were largely steady around the lowest levels so far this year.
Global benchmark Brent futures slid to a four-year low of $58.50 a barrel on May 5, before recovering to levels in the mid-$60s by the middle of June.
Prices at these levels likely encouraged Chinese and Indian refiners to boost purchases, especially as refinery maintenance season was also ending.
However, the brief conflict between Israel and Iran in late June, later joined by the U.S., saw oil prices spike higher, with Brent reaching a six-month high of $81.40 a barrel on June 23.
While prices have eased back to around $68.40 a barrel in Asian trade on Tuesday, the sharp increase in June may result in Asian buyers such as China and India trimming imports for cargoes that will arrive in September.
The increase in Asia’s imports in August also came amid the unwinding of voluntary production cuts by eight members of the wider OPEC+ group, including the two biggest exporters Saudi Arabia and Russia.
Asia’s imports from the two OPEC+ leaders grew in August, with arrivals from Saudi Arabia reaching 5.20 million bpd in August, up from 4.77 million bpd in July and the most since March, while imports from Russia were 3.48 million bpd in August, up from 3.39 million bpd in July.
Asia’s imports from other Middle East exporters including the United Arab Emirates, Iraq and Oman also increased in August from July levels.
The overall picture that emerges from Asia’s crude oil imports is that they are modestly higher so far this year, but still short of the demand forecasts made by OPEC.
It also appears that prices are driving imports by China and India, and that any supply tightness caused by production cuts by the OPEC+ group is starting to ease.
Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
(Editing by Muralikumar Anantharaman)