Chinese policy critical to Asian crude prospects

All eyes are on Beijing as forecasters debate the prospects for the recovery of Asia’s oil demand

Asian crude demand is making an uneven recovery as the continent emerges from the coronavirus pandemic. Opinion is split on the near-term outlook, however, as Chinese policies have already had a negative impact and—in concert with other factors—could potentially cap or even derail the rebound. Chinese crude imports were down in the second and third quarters of this year after rising in the first quarter following a post-Covid pick-up in industrial activity. The renewed slowdown came after Beijing introduced policies for refiners that included reduced crude import quotas for independents, a new consumption tax on blending components and deep cuts to product export quotas for all players— incl