Asia Is on the Brink of a Major Fuel Crisis: Media Outlets Cite the Cause
20 August 14:06
China is rapidly increasing its purchases of Russian oil to replace supplies from the Middle East. This is causing a shortage of raw materials in India and creating the risk of an acute fuel shortage across Asia. This was reported by "Komersant Ukrainian", citing Reuters.
“One of the factors that prevented a sharp rise in crude oil prices during the war with Iran was India’s purchase of record volumes of Russian crude oil. But for the world’s third-largest importer of crude oil, the situation is becoming increasingly difficult as China, the leading importer, resumes purchases from Russia amid prolonged supply disruptions caused by the conflict.” — Reuters reports.
As noted in the report, according to estimates by Kpler analysts, Russian crude oil imports to China by sea in August will total 1.25 million barrels per day. Although this is slightly less than July’s figure of 1.423 million barrels, both months saw the highest volumes since April of this year.
China has significantly changed the structure of its purchases—in particular, Beijing previously imported oil mainly from eastern Russian ports (ESPO grade). At the same time, in August, the share of shipments from European terminals (Urals grade) rose to 31%.
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Decline in Imports to India
The redirection of crude from European ports in Russia to China has hit India, which is the main buyer from that route.
“This could have a potentially negative impact on Asia’s already limited markets for petroleum products, given that India is a major exporter of diesel and gasoline,” the publication notes.
The total volume of Russian energy imports to India in August fell to 1.87 million barrels per day. By comparison, in July this figure stood at 2.79 million, and in June—2.73 million barrels per day.
“India is already facing difficulties in finding a replacement for Russian fuel, which China is now purchasing. Since India is the region’s largest exporter of gasoline and diesel fuel, the shortage of crude oil for Indian refineries will become apparent as early as September,” the report states.
If the shortage of raw materials leads to a reduction in exports of refined petroleum products, a severe fuel crisis could begin in Asia.
It should be noted that over the past few months, drone strikes have disabled up to 40% of Russia’s oil refining capacity. As a result, approximately one-third of Russians have already experienced fuel shortages.
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