Asian crude oil imports were strong at the start of 2024 as China and India snapped up

(1) Asia’s crude imports grew strongly in the new year, reaching an eight-month high in January, as major buyers China and India snapped up cargoes. The world’s largest crude importer arrived 28.57 million b/d in January, up from 27.03 million b/d in December, according to data compiled by LSEG Petroleum Research. (2) China, the world’s largest crude buyer, imported 11.31 million b/d in January, slightly lower than the 11.48 million b/d in December but well above the 10.24 million b/d in January 2023, LSEG data showed. (3) Chinese refiners may be encouraged to keep imports at strong levels, given the generally low oil prices at the time of cargo arrangement, and the issuance of most annual import quotas in early 2024, rather than the customary instalments. China imported 1.94 million b/d of crude from Russia via pipelines and tankers in January, surpassing 1.68 million b/d from Saudi Arabia, making Russia its largest supplier. (4) However, it is worth noting that crude arrivals from Saudi Arabia increased from 1.38 million b/d in December, suggesting that the world’s largest crude exporter is struggling to regain market share in China. (5) China’s imports from Saudi Arabia are likely to increase further in February after Saudi Arabia lowered the official selling price (OSP) of its flagship Arabian Light crude for February loading to a 27-month low. Not only did China buy more Saudi oil, but Asia rise to 5.63 million b/d in January from 5.46 million b/d in December. (6) According to trade sources, India has stopped buying Saudi crude in favor of discounted crude from Russia, but will seek more cargoes from Saudi Arabia in February. India, Asia’s second-largest crude importer, is on track for a record January import, with LSEG tracking January arrivals at 5.33 million b/d, up from 4.65 million b/d in December. (7) Russia remains India’s largest supplier, importing 1.43 million b/d in January, up from 1.34 million b/d in December, and Iraq in second place with 1.34 million b/d, up from 1.1 million b/d in December. (8) Given the good performance of the Indian economy and the rising margins of refined products in the Asian market, Indian refiners are likely to continue to buy large quantities of crude oil on this strong momentum. (9) The question for the market is whether the strong momentum of Asian crude oil imports at the beginning of this year is likely to continue. Imports are also likely to be strong in February, largely because cargoes arriving this month were bought at a time when crude oil prices were weak. However, Brent crude oil prices have rebounded since mid-December, and the pullback seen in January on global demand concerns has been reversed in recent weeks amid growing concerns about the disruption of Red Sea shipping due to missile and drone strikes by Yemen’s Houthi rebels