Summary

US crude imports were broadly flat in July, averaging 6.5 mb/d, near 18-month highs, while crude exports dropped back to 2.7 mb/d amid reduced flows to India. US product imports drifted lower m-o-m, although remaining at a still high 2.6 mb/d. Product exports picked up m-o-m in July, averaging 5.6 mb/d, representing an 8% increase over pre-COVID July 2019 levels.

Japan’s crude imports plunged almost 20% m-o-m in June to average 1.9 mb/d, undermined by renewed lockdown measures. Amid lockdown measures and no spectators, the Tokyo Olympics are likely to have a net negative effect on domestic demand, weighing on crude and product imports.

China’s crude imports rose m-o-m in June, but remained at lower levels, averaging 9.8 mb/d amid government efforts to rein in teapot refineries and crack down on import quota and tax irregularities. China’s crude imports are expected to be capped close to current levels as refiners continue to destock and amid increased government oversight. Product exports could fall back as domestic demand has been healthy, although the spread of the Delta variant inland adds some overall uncertainty.

India’s crude imports continued to fall in June, reaching an eight-month low of 3.9 mb/d, affected by refinery maintenance and the ongoing impact of the Delta variant. In contrast, product imports rebounded by 20% m-o-m to average 1.0 mb/d, led by a strong jump in LPG and naphtha inflows, as the economy restarts. With a sharp drop in new COVID-19 infections, refiners have begun to lift run rates, which could strengthen crude inflows, particularly later this year.

OECD Europe crude imports hit a four-month high in April, averaging 7.9 mb/d. More recent data show crude imports have fluctuated, as demand has not picked up as strongly as previously expected. Tanker data show crude exports falling in June, amid seasonal maintenance and reduced flows to China.