Energy News Today

Column: Asia’s crude oil imports remain weak as retail fuel prices stay high: Russell

An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS /File Photo

Register now for FREE unlimited access to

LAUNCESTON, Australia, Sept 15 (Reuters) – Asia’s crude oil imports are on track for another soft month in September, as the world’s top-importing region battles uncertain demand amid high retail fuel prices.

Asia’s imports are estimated at 24.98 million barrels per day (bpd) in September, about the same as August’s 24.9 million bpd and July’s 24.55 million bpd, according to data compiled by Refinitiv Oil Research.

China, the world’s largest crude importer, is the main factor behind the weak trend, with Refinitiv forecasting September imports of around 9.15 million bpd, down from the official customs figure of 9.5 million bpd in August.

Register now for FREE unlimited access to

The weakness in Asia’s crude imports stands in contrast to a market narrative that global oil supply is tight, thereby justifying prices remaining at elevated levels.

Benchmark Brent crude futures were at $94.53 a barrel in early Asian trade on Thursday, having bounced from a 10-month low of $87.40 on Sept. 7.

Crude prices have retreated from the highs above $120 a barrel seen in the wake of Russia’s Feb. 24 invasion of Ukraine, but so far this has failed to spark any resurgence in demand in Asia.

Part of the problem is that, while crude prices have moderated, in many major countries in the region retail fuel prices have not, thereby dampening consumer demand while stoking inflation pressures, which in turn lead to tighter monetary policy and slowing economies.

The retail price of diesel in China has dropped from a record high of 9.03 yuan ($1.30) a litre in mid-June, but remains at a high by historic standards of 8.10 yuan.

India, Asia’s second-biggest crude importer, has held diesel prices steady for the past five months as the government has tried to limit losses for state-owned refiners, which supply most of the country’s fuel.

A litre of diesel costs 94.27 rupees ($1.19) in Mumbai, down from the 2022 high of around 106 rupees in May, but, as in China, it remains high by historical standards.

In Australia, the national average diesel price in the week to Sept. 11 was A$2.06 ($1.39) a litre, down from 2022 highs of about A$2.40, but also some 37% higher than the price at the same time last year.

Fuel prices in Australia are poised to rise by around 25 Australian cents a litre on Sept. 29, when a six-month temporary cut in excise duty comes to an end.


What becomes clear is that, while many governments in Asia acted to limit the impact of crude’s price surge in the wake of Russia’s attack on Ukraine, retail fuel prices remain at high levels.

This is partly because of high crude prices, but also because of a lack of spare refining capacity in Asia, a situation made worse by the sharp drop in China’s refined product exports in 2022.

China’s exports of refined fuels have slumped 33.5% in the first eight months of the year, removing about 475,000 bpd of diesel, gasoline and other products from the regional market.

What is happening in many Asian markets is something of a paradox, with crude oil prices moderating from their post-Ukraine invasion highs, but retail prices remaining elevated.

It’s hard to make a case for stronger crude demand while retail fuel prices remain high, but it’s equally hard to make a case for lower fuel prices while refiners are struggling to produce enough, and the threat of the loss of Russian fuel exports looms large.

Register now for FREE unlimited access to

Writing by Clyde Russell; Editing by Bradley Perrett

Our Standards: The Thomson Reuters Trust Principles.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

Clyde Russell

Thomson Reuters

Clyde Russell is Asia Commodities and Energy Columnist at Reuters. He has been a journalist and editor for 33 years covering everything from wars in Africa to the resources boom and its current struggles. Born in Glasgow, he has lived in Johannesburg, Sydney, Singapore and now splits his time between Tasmania and Asia. He writes about trends in commodity and energy markets, with a particular focus on China. Before becoming a financial journalist in 1996, Clyde covered civil wars in Angola, Mozambique and other African hotspots for Agence-France Presse.

Read More: Column: Asia’s crude oil imports remain weak as retail fuel prices stay high: Russell

2022-09-14 23:57:00

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy
%d bloggers like this: