The main driving forces behind the growth were India and Japan — responsible for combined growth in January of 690,000 bpd. A major factor underpinning the rise in Indian imports was the increased load assumed by the Mumbai refinery on the country’s west coast. At the end of 2021, the refinery resumed operations after six months of planned maintenance, enabling it to boost its capacity from 150,000 bpd to 190,000 bpd. Another factor stimulating growth was the completion of modernisation work at the Visakh refinery in southern India – its capacity will rise by March from 166,000 bpd to 300,000 bpd.
Increased imports in Japan were linked to the relatively high use of fuel oil and diesel generation in the local electricity market.
While in China, the share of oil products in power generation stood at 0.1 % and the figure in South Korea was 1.2 %, in Japan the figure stood at 4.1 %, according to data from BP’s Statistical Review of World Energy. And the seasonal increase in demand for power coincided with a reorientation of supplies of liquefied natural gas to European markets – China, Japan, India and South Korea reduced imports of LNG in the fourth quarter by 5 % year-on-year (to 76 billion cu.m.), while Europe boosted its imports by 36 % (to 33 billion cu.m.) This made it more difficult to secure access to gas for power generation – in Japan, gas-fired stations accounted for 30% of the total in 2021.
Increased imports in the period from December 2021 to January 2022 were also noted in South Korea and Singapore (by a total 1.18 million bpd) as well as in smaller eastern Asian countries (by a total of 120,000 bpd). But the general rise was offset by a reduction in imports in China (by 1.17 million bpd), where oil import quotas for small independent refiners were reduced by 11 % from 2022.
In the months to come, China could once again boost its imports, in part because of the forthcoming launch of the Lianyungang refinery in the east of the country – the facility has secured permission to import nearly 320,000 tonnes of oil.
The rise in demand in Asia brings oil markets close to restoration of pre-crisis levels. World-wide consumption of oil and liquid hydrocarbons in the first quarter of 2022 will total 99 .5 million bpd, according to forecasts issued by the U.S. Department of Energy’s Energy Information Administration (EIA). By way of comparison – in the fourth quarter of 2019, this indicator totalled 101.7 million bpd after which it began to decline (to 94.9 million bpd) in the first quarter of 2020 and 84.9 million bpd in the second quarter of 2020.