Crude inflows to India and China climb, offering relief to freight-hit oil trade

India and China are taking in far more crude than usual, giving producers a rare break in a year when global oil trade has been under heavy pressure, according to Bloomberg.

Traders who handle Middle Eastern barrels said buyers in both countries stepped in at the start of November and cleared cargoes that had piled up after a rough October cycle.

That shift comes at a moment when producers everywhere are dealing with a market drowning in supply and hit by nonstop sanctions tied to Russia’s war in Ukraine.

Middle Eastern sellers had been stuck with extra shipments, including a wave from the United Arab Emirates and additional barrels from Kuwait after an outage at the Al‑Zour refinery.

Those barrels finally moved when refiners in Asia placed new tenders, with China taking many of the UAE’s Upper Zakum cargoes while Indian refiners absorbed the rest of the material.

The backdrop for all this is brutal. Brent, the global oil benchmark, has dropped 15% this year. It sits near the bottom of the commodity performance table for 2025.

The fall happened as OPEC raised quotas and producers outside the group expanded pumping at the same time. The International Energy Agency warned of a record glut building.

Traders handling US futures watched the nearest two contracts fall into contango, a bearish pattern showing weak demand.

China and India boost crude buying as US sanctions widen

Washington has been tightening enforcement on Russian crude flows. Officials in the White House have targeted major suppliers Rosneft PJSC and Lukoil PJSC.

President Donald Trump said on Sunday that Senate legislation to blacklist countries that keep buying from Moscow would be “okay with me.” That signaled more restrictions ahead for Russian barrels and more pressure on their regular customers.

With those limits growing, refiners in India and China used the moment to buy more barrels from everywhere else. Bharat Petroleum Corp. placed tenders for Middle Eastern, West African and US grades.

HPCL‑Mittal Energy Ltd. picked up Qatari Al‑Shaheen. Chinese refiners bought a mix of Middle Eastern and West African shipments, using the deep discounts seen across the market.

Manoj Heda, executive director of international trade at Bharat Petroleum, summed up the situation during an industry event. Manoj said, “There is a lot of supply in the market,” before adding that “demand centers are only limited to China and India.”

That buying helped Middle Eastern exporters keep some price strength compared to other regions.

Measures like the Brent‑Dubai swap spread and the Brent‑Dubai EFS were negative last week, placing Brent at a rare discount to Dubai, even with massive global oversupply.

The fact that cargoes still cleared gave producers some breathing room, even though differentials kept slipping as the month went on.

Discounts deepen as refiners push down prices across regions

Even with cargoes clearing, sellers are being forced to let barrels go at cheaper prices. Oman, Murban and Upper Zakum all saw differentials to Dubai tighten through the month.

General Index data showed steady drops as buyers demanded more cuts. Every shipment moved, but nothing moved at a premium.

West Africa is also seeing slower activity. Differentials there keep weakening. Even so, refiners in India and Indonesia bought 11 cargoes late last week.

Chinese firms added more West African barrels to their intake and also picked up crude from Latin America.

Regions where China and India rarely buy crude are facing the sharpest pain. The North Sea, home of Brent pricing, has been hit by heavy selling in its main trading window.

Programs for December show loadings of 13 major grades are set to average 2.1 million barrels a day, the highest level in eight years. With that much crude heading to water, sellers fear another wave of discounts.

Through all of this, the oil market continues to rely on China and India to ease the pressure. Producers may not love the prices, but with global oil demand soft and global oil supply high, the barrels have to move somewhere.

And for now, those barrels are finding homes in Asia. Whether that relief holds will depend on how long the world keeps pumping more oil than it needs, and how long China and India decide to keep pulling in extra oil while everyone else steps back.

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