The crude tanker market in September saw a marked upswing, with rates rising to their highest levels in years. Rising crude imports from Asia, supported by USG-Asia arbitrage flows, boosted ton-mile demand, while stockpiling and pre-winter procurement increased shipments. Simultaneously, OPEC+ continued to raise production, albeit at a slower pace, adding cargoes to the market, while favourable pricing encouraged refiners in China and India to secure barrels promptly.
This surge in demand put pressure on VLCC supply, constrained by increased enquiries and long-haul voyages, reducing active fleet. Structural factors compounded this tightness: the VLCC fleet is expected to remain largely flat through 2025, aging with an average vessel age of 13 years versus a historical norm of approximately 10, and roughly 20% of tonnage over 20 years old. Fleet renewal remains limited, with the orderbook-to-fleet ratio at 12.3% compared with a historical average of 18%.
Given the current market conditions, raising the question for owners of whether this is a short-lived spike or the start of a more sustained upcycle, it is meaningful to examine the underlying demand fundamentals of the two major Asian importers: China and India.
In September, China’s crude imports rose approximately 6.5% y-o -y, with most volumes sourced from the Middle East and notable contributions from Brazil, West Africa, and Russia. Rising imports via Indonesia suggest that Iranian crude continues to flow into the market. However, amid slowing economic growth and trade frictions, the increase appears driven primarily by strategic stockpiling amid competitive pricing, rather than domestic consumption, raising concerns about the sustainability of demand. Moreover, China’s refining sector faces challenges, including overcapacity, and weakening fuel demand. Rising NEV adoption and the broader energy transition have further reduced domestic fuel consumption, forcing refiners to scale back production. On the policy front, Beijing is pressing for greater industry consolidation, while recent efforts to tighten compliance reporting are squeezing margins at smaller independent “teapot” refineries. Overall, within this challenging landscape, China’s crude imports are projected to grow modestly, slowing from 2% in 2025 to 1% in 2026.
By contrast, India’s crude imports remain resilient, supporting expanding refining activity and domestic consumption. According to the Ministry of Petroleum and Natural Gas, High-Speed Diesel (HSD) exports rose 23% y-o-y in August, while aggregate summer exports increased 15% y-o-y, driven by higher refining throughput and higher ethanol blending policy. A significant share of fuel exports is destined for Europe ahead of winter, while domestic demand is expected to rebound post-monsoon. In September, India’s crude imports grew 8% y-o-y, with roughly one-third sourced from Russian price-capped oil, enabling refiners to compete effectively in domestic and export markets. The remainder primarily came from the Middle East, the U.S., and Nigeria, though U.S. pressure to curb Russian oil purchases could reshape India’s import profile. Policy support, particularly the ethanol blending program, which increased the share of ethanol in gasoline from 12% to 20%, has freed additional volumes for export, indirectly supporting crude demand. As a result, both crude imports and product exports are projected to grow around 5% in 2025, with similar expansion expected in 2026, reflecting a robust, exportoriented demand profile.
Both China and India support the crude market, though their demand profiles differ. China’s imports are currently elevated due to strategic stockpiling, but the duration of this demand remains uncertain. Meanwhile, Indian demand appears more sustained, backed by refining expansion, policy-driven efficiencies, and healthy exports. Stronger Indian growth prospects also signal stronger oil demand with the OECD raising the raising the country’s 2025 GDP forecast to 6.7% from 6.3%, supported by domestic demand and policy reforms, pointing to resilient oil imports. At the same time, China’s GDP is slowing from 5% in 2024 to 4.9% in 2025 amid sluggish industrial activity and property sector challenges.
In summary, China’s crude imports appear more fragile, driven largely by stockpiling amid economic headwinds and the rapid expansion of the EV sector, while India’s steady growth prospects and expanding refining capacity seem well-positioned to continue supporting crude tanker markets, should Chinese demand begins to ease.
Data Source: Intermodal