Australia takes more gasoil from India, Mideast Gulf

Australia is importing more gasoil from the Mideast Gulf and India because of rising demand and lower availability from east Asia.

Exporters in east Asia make up the largest share of Australia's gasoil market, delivering 320,000 b/d to the country in 2019, more than 90pc of total Australian imports, according to data from oil analytics firm Vortexa. Japan was the largest supplier last year, followed by Singapore and China.

But a fall in exports from Japan, China and South Korea has boosted Australia's imports from the Mideast Gulf and India so far this month.

India has become the second largest gasoil supplier to Australia this month behind Singapore, with about 33,500 b/d loaded from the west coast ports of Sikka and Vadinar to move towards Australia in May, according to Vortexa. India exported just 6,400 b/d of gasoil to Australia in May 2019.

Around 22,000 b/d of gasoil has loaded from Mideast Gulf destined for Australia so far this month, double April's levels. Australia did not import any Mideast Gulf gasoil in May 2019.

Recovering Australian and Middle East diesel demand has supported Mideast Gulf gasoil prices, which have strengthened to a 45¢/bl discount to Mideast Gulf 10ppm sulphur gasoil spot assessments on 21 May after falling to a record low of a $1.15/bl discount on 28 April.

Diesel consumption has increased in Australia, where the mining sector has largely shaken off the impact of Covid-19. Diesel demand was 537,000 b/d in March, up by 8.6pc from 494,000 b/d a year earlier.

Australian oil product demand totalled 1mn b/d in March, almost unchanged from 1.04mn b/d a year earlier and 1.03mn b/d in February, according to Australian Petroleum Statistics data. Diesel accounted for 53pc of total demand in March, the largest proportion recorded in the data series that starts in July 2010.

Demand may have got a boost from stockpiling by mining firms amid the potential for the coronavirus to affect global supply chains. The Australian mining industry, a key consumer of diesel, has been largely unaffected by the pandemic with most mines continuing to operate with only minor changes to rosters and travel arrangements.

By Sarah Raffoul and Yawen Lu