Global crude imports decline in July
Global crude/condensate imports are down by over 1mbd m-o-m in July, coinciding with elevated concerns over the state of global oil demand
Vortexa data shows seaborne crude/condensate imports from many of the world’s largest producers has fallen in July with Chinese demand again a key contributor to the decline. Global imports of crude/condensate, excluding those from Iran and Venezuela, fell just below 38mbd in July, down from 39mbd in June and the lowest monthly import total since August 2022.
On the supply side, imports from almost all major producers fell m-o-m with Saudi, Iraq, UAE and the US the posting the largest declines. The only major producer to see an increase was Brazil. Global crude/condensate imports, though lower in July, were also more distributed than previous months with volumes from nations outside the top suppliers reaching highs previously seen in January 2023.
Saudi Arabia, Iraq and UAE
Global imports from Saudi Arabia fell the lowest total since September 2023 as the country’s domestic power-gen needs stepped up. Intra-Saudi flows of crude and residual fuel oils heading to power generation sites remained close to record highs around 760kbd.
Imports from Iraq also fell sharply in July with reduced imports from China being the biggest contributor. India also imported less Iraqi crude, continuing the trend to import higher volumes of Russian crude, at the expense of Middle East grades. Meanwhile imports from UAE also fell as Japan and South Korea reduced imports from one of its most regular suppliers.
Non-OPEC producers
Imports of Russian crude fell to its lowest since February, partly due to shrinking Chinese import demand but seasonal factors (domestic demand, field maintenance) reducing Russia’s export availability.
Similarly, Asia’s imports of US-loaded crude/condensate fell 240kbd m-o-m. But it is important to note given the longer voyage time and trade cycle, the drop in imports from the US reflects weaker purchasing activity two to three months prior. A wider WTI-Dubai spread may also restrict US flows to Asia in the coming weeks.
One smaller bright spot on supply is for Canada and its start-up of the TMX pipeline which feeds into the waterborne market from Vancouver. Global imports of crude originating from Canadian terminals rose almost 300kbd m-o-m in July to reach a record high. This will likely increasingly feed Asian refiners with (relatively cheap) heavy-sour crude.
Asia imports weakness
On a destination basis, the main factors behind the global slowdown in crude imports was a sharp slide in China’s imports (700kbd) and also from South East Asia (470kbd). This drop in Chinese crude imports is a persistent theme seen in previous months, underlining weak domestic demand and also fits with bearish demand signals seen via rising onshore crude inventories and product flows at Singapore/Malaysia.
In contrast, import volumes for Northwest Europe and the Mediterranean region grew in July by 520kbd m-o-m. However this is by no means a signal for strong European demand as the growth in July can be interpreted as a revision upwards, but still at historically low levels
Looking ahead, the crucial question remains to what extent and how quickly will key OPEC members add more barrels into the market, especially given that production cuts could be eased from next month. The bearish demand signals from China, but also in pockets from other regions, means that any meaningful increase in global exports would put firm pressure on prices. However, if the goal is indeed to maintain or even build market share at a time when demand looks shaky, likely more supply should be anticipated.
