India, China Driving Healthy Oil Demand Growth: Saudi Aramco Chief
14:39 27.06.2023 (Updated: 15:53 27.06.2023)
© AP Photo / Hasan Jamali
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For years, China and India have remained the world's second and third-largest importers of crude oil, with their combined population of over 2.8 billion people driving the demand.
Saudi Aramco Chief Executive Amin Nasser on Monday said that India and China would continue to spur the market of oil, offsetting any risks whatsoever from developed countries from Western Europe.
"Overall, we believe that oil market fundamentals remain generally sound for the rest of the year," Nasser said on the sidelines of the Energy Asia conference in Kuala Lumpur.
"Despite the recession risks in several Organisation for Economic Co-operation and Development (OECD) countries, the economies of developing countries – especially China and India – are driving healthy oil demand growth of more than 2 million barrels per day this year," the head of the world's largest crude firm added.
The Aramco boss' comments come at a time when some oil firms from Asia project a bleak market for the second half of 2023.
Among those that have hinted at a slowdown in demand for oil is Malaysia's public sector oil company Petronas.
This came after the Malaysian economic growth slowed down in the first quarter of 2023. After growing at 7.1 percent in the final quarter of last year, the Southeast Asian country grew at an annualized rate of 5.6 percent in the first three months of this year.
India's Import of Oil from Russia
On the other hand, India has remained the bright spot among major economies, growing at 7.1 percent in the last fiscal year; it is predicted to grow at a similar pace in 2023-24.
On the oil front, India alongside China is among the largest purchasers of crude from Russia.
In May, New Delhi imported a record level of oil from Moscow. As per the stats from cargo tracking firm Vortexa, India procured as much as 1.96 million barrels a day (bpd) from its close ally last month, accounting for a 15 percent jump compared with April.
While India's imports from traditional suppliers like Iraq, Saudi Arabia, and UAE fell due to a jump in its oil purchases from Russia, New Delhi continues to buy crude from these Middle East nations.
On the oil front, India alongside China is among the largest purchasers of crude from Russia.
In May, New Delhi imported a record level of oil from Moscow. As per the stats from cargo tracking firm Vortexa, India procured as much as 1.96 million barrels a day (bpd) from its close ally last month, accounting for a 15 percent jump compared with April.
While India's imports from traditional suppliers like Iraq, Saudi Arabia, and UAE fell due to a jump in its oil purchases from Russia, New Delhi continues to buy crude from these Middle East nations.
India imported 801,400 bpd and 616,100 bpd of oil from Iraq and Saudi Arabia respectively in May 2023.
Meanwhile, China's economy is witnessing a slump after a brief recovery following two years of COVID-induced lockdowns.
Despite headwinds in other sectors, China's petrochemical and transport markets have been showing growth; that's perhaps why demand for oil has remained high there.
Meanwhile, China's economy is witnessing a slump after a brief recovery following two years of COVID-induced lockdowns.
Despite headwinds in other sectors, China's petrochemical and transport markets have been showing growth; that's perhaps why demand for oil has remained high there.
G-7 Sanctions Against Moscow
The G-7 countries have imposed 11 rounds of sanctions against Russian government and private entities in order to deprive Moscow of revenues in various sectors.
However, the West’s efforts against Russia have been offset by a significance increase in Russian crude exports to India and China.
India and many other developing countries have increasingly ignored the collective West’s calls to stop buying Russian crude. Nations like India and China have significantly ramped up their Russian energy imports, with other developing states such as Pakistan also eyeing increased imports.
