17 hours ago
Asia's crude oil imports jump in June, but higher prices will weigh: Russell
(The views expressed here are those of the author, a columnist for Reuters.)
LAUNCESTON, Australia - Asia's imports of crude oil rose in the first half of 2025 as a surge in June arrivals overcame a soft start in the early months of the year.
The world's top-importing region saw arrivals of 27.36 million barrels per day (bpd) in the first half of this year, up 620,000 bpd from the 26.74 million bpd for the same period last year, according to data compiled by LSEG Oil Research.
The stronger performance was mainly because June imports surged to 28.65 million bpd, the highest in LSEG data since January 2023 and up from 27.3 million bpd in May and 26.42 million bpd in June last year.
The strength in June imports was led by China, the world's top importer, with LSEG estimating arrivals at 11.96 million bpd, the most since the 12.11 million bpd recorded in March.
India, Asia's second-biggest buyer, is on track for June imports of 5.26 million bpd, which will be the highest since the 5.35 million bpd in March.
The question for the market is whether the strength seen in Asia's June imports is the harbinger of stronger demand in the second half, or whether it was driven by temporary factors.
The most obvious of the temporary factors is price, with both China and India known to be sensitive to price movements, increasing imports when they are low but cutting back when they rise.
June-arriving cargoes would have been arranged six to eight weeks before delivery, meaning that they were secured at a time when oil prices were in a downtrend.
Global benchmark Brent futures went from a high of $75.47 a barrel on April 2 to a four-year low of $58.40 on April 9, then traded sideways before another low of $58.50 on May 5.
Since the low on May 5 Brent has been trending higher, reaching $70.40 a barrel on June 12, the day before Israel launched its bombing campaign against Iran.
The Israeli attacks and the subsequent U.S. bombings saw crude spike to a five-month high of $81.40 a barrel on June 23, before the risk premium evaporated with a ceasefire deal announced by U.S. President Donald Trump.
AUGUST IMPACT?
The increasing prices will be felt by Asia's refiners mainly for cargoes arriving in late July and in August, so it will be key to monitor whether there is any pullback in imports in that time period.
Certainly there is little to suggest that demand for crude and refined products is growing strongly in Asia.
China's refinery processing rose only 0.3% in the first five months of the year to 14.47 million bpd, according to the latest available official data.
The tiny gain in refinery throughput suggests that demand growth for refined products in China is sluggish and that the additional crude being imported is largely being added to inventories.
India's fuel demand is also flat, with data from the Petroleum Planning and Analysis Cell of the oil ministry showing consumption of refined products at 4.51 million bpd for the first five months of 2025, from 4.52 million bpd for the same period in 2024, based on Reuters calculations from monthly tonnages.
The increase in oil prices in recent weeks, and the shock of the spike during the Israeli and U.S. attacks on Iran, are likely to weaken Asia's demand for crude imports from August onwards.
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The views expressed here are those of the author, a columnist for Reuters.
