Asia's Oil Imports Drop 3%

Asia's crude oil imports are off to a weak start in 2025, as top importer China continues to buy less and new sanctions put the brakes on cargoes from the continent's top supplier Russia.

Asia's imports for the first two months of the year are on track to be 26.17 million barrels per day (bpd), down 780,000 bpd from the 26.96 million bpd for the same period last year, according to data compiled by LSEG Oil Research.

The drop of about 3% in crude imports by Asia in the first two months of this year from the same period in 2024 brings into question the forecasts from the Organization of Petroleum Exporting Countries (OPEC) and other analysts for solid demand growth this year.

The weakness in Asia's crude imports in the January-February period was driven by China, with the world's top oil importer seeing arrivals of 10.42 million bpd, down 840,000 bpd from the 11.26 million bpd for the first two months of 2024.

The first two months of 2025 has seen the weakness in China's crude imports accelerate from the pace of decline recorded in 2024.

China's oil imports were 11.04 million bpd in 2024, according to official customs data, leaving them down 210,000 bpd, or 2.1%, from the previous year.

The world's second-largest economy has struggled to build economic growth momentum since emerging from its strict COVID-19 lockdowns, with property construction a key weak sector.

But the rapid switch to electric and hybrid cars has also trimmed gasoline demand growth, and the same is occurring for diesel demand given the increasing adoption of trucks powered by liquefied natural gas.

OPEC forecast in its February monthly report that China's crude oil demand will rise by 310,000 bpd in 2025 from the previous year, but the weak start to imports in the first two months of the year makes this look optimistic.

In contrast to China, Asia's second-biggest oil importer India got off to strong start in 2025, with arrivals of 4.98 million bpd in the first two months, up 280,000 bpd from the 4.70 million bpd for the same period last year.

However, it's worth noting that January's imports were 5.08 million bpd, and these slipped to 4.87 million bpd in February, which reflects that India may have been struggling to secure as much discounted Russian oil as it had been over 2024.

The outgoing administration of former U.S. President Joe Biden introduced new sanctions on Russia's oil exports in January, largely targeting the so-called shadow fleet of tankers that deliver crude to India and China, the only two major buyers left to Moscow.

Asia's imports of seaborne Russian crude are on track to fall to the lowest in February since May 2022, according to data compiled by commodity analysts Kpler.

A total of 67.2 million barrels of Russian crude, equivalent to 2.40 million bpd, is expected to arrive in Asia in February, down from 2.75 million bpd in January and just better than half of the peak imports of 3.97 million bpd from May 2023.

Asia's imports of Russian oil will have dropped for a fourth consecutive month in February, indicating that Western sanctions put in place after Moscow's February 2022 invasion of Ukraine are working to some extent.

There is the possibility that Asia's imports of Russian crude will recover in coming months, firstly as traders find ways around the sanctions as they have done in the past, or if sanctions are relaxed by new U.S. President Donald Trump as part of efforts to end the conflict in Ukraine.

But the broader question of whether Asia's crude oil imports will be strong enough to meet the forecasts for rising demand this year remains highly uncertain, given the evidence of weakness in the first two months.