SOURCE: REUTERS
Asia’s imports of crude oil are expected to rise to the highest in 10 months as heavyweights China and India lifted arrivals from Russia, but impending maintenance schedules and rising prices mean such levels may not be sustained.
The world’s top importing region is forecast to see arrivals of 27.48 million barrels per day (bpd) in March, up from 26.70 million bpd in February and January’s 27.18 million bpd, according to data compiled by LSEG Oil Research.
The bulk of oil arriving in March was arranged before the current increase in prices, which has seen Brent move from a six-month low in December to trade above $80 a barrel since early February.
The rebound in imports is being driven by China, the world’s biggest crude buyer, which is forecast to have arrivals of 11.75 million bpd in March, up from February’s 11.16 million bpd and 10.44 million bpd in January.
India is also chipping in to stronger demand, with imports expected to reach 4.93 million bpd, up from February’s 4.55 million bpd and in line with January’s 5.06 million bpd.
China’s imports have been boosted by refiners likely increasing throughput to build up inventories of fuel ahead of the maintenance season that normally runs from late March through to early June.
As much of 800,000 bpd of refining capacity is likely to be offline at some point during this time, according to LSEG data.
This raises the possibility that China’s crude imports may moderate during the maintenance season, but much will depend on whether the tentative signs of economic recovery in the world’s second-biggest economy continue to appear and accelerate.
It’s also worth noting that China’s strong crude imports in the first quarter would have been secured at a time when global oil prices were below the current levels.