BERLIN: Asia's crude oil imports rose in September, but this is probably a reflection of expectations for better product demand from Europe in the coming winter, a sign of the region's economic health.

The world's top importing sector imported 26.58 million barrels of crude per day (bpd) in September, up from 24.90 million bpd in August, according to data collected by Refinitiv Oil Research.

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The import volume was the highest since May at 26.62 million bpd and the third-highest month of the year.

However, an analysis of imports for September shows that only the two nations, which used their refineries more frequently after the maintenance period, increased by 85% from August.

China, the world's biggest oil importer, saw arrivals of 10.19 million bpd, the highest level since May and an increase of 650,000 bpd since August.

South Korea imported 2.70 million bpd from 3.05 million bpd, while Japan imported 3.14 million bpd in September, up from 2.94 million bpd in August.

Asia's crude imports rose overall in September as refiners stocked up for the upcoming northern winter and more plants restarted after maintenance.

As the continent plans to stop importing Russian crude oil in December and products two months later, it is anticipated that Europe may turn to Asia for refined products, especially diesel, during the winter.

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Refinitiv reported that in September, Europe imported 4.6 million tonnes of goods from outside the region, a two-year high.

Of those 4.6 million tons, 1.64 million originated in Russia, which Refinitiv classifies as being outside Europe.

If Europe follows through on its plan to impose import restrictions on Russian crude oil and products, it would need to import about 1.6 million tonnes of the fuel each month from elsewhere. Given Asia's excess refining capacity, China in particular would be the best region to supply this additional fuel.

China exports fuel

China has increased its export quota by 15 million tonnes for the rest of the year, but due to shipping restrictions, actual exports are unlikely to reach that level.

However, it is likely that China will increase its exports of the refined fuel, which may result in a partial recovery in crude oil imports.

However, it is also possible that China may use its growing raw materials to increase product exports. In the first eight months of 2022, the country added 1.46 million bpd to its reserves as refinery processing depleted more than imports.

Boosting product exports but crude oil imports will not help China's economy, which is currently struggling to recover from stringent COVID-19 lockdowns and funding problems in its crucial real estate construction sector.

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It would enable Beijing to express its displeasure with the group's decision to lower its production quotas by 2 million bpd last week to the group of OPEC+ exporters, a move widely used to keep oil prices above $90 a barrel. perceived as effort, even as the world. The economy is heading towards a possible recession.

Overall, it does not appear that Asia's growth in crude imports in September will signal the beginning of a sustained period of higher import numbers.

An impending economic slowdown is likely to further hamper demand and a stronger dollar will be impacted by increased shipments of goods to Europe, keeping retail prices near record highs in many Asian countries.