World’s Top Oil Guzzlers Surpass Pre-Pandemic Consumption

Trucking and construction activities typically decline in India from June to September because of the monsoon. That weighs on demand for diesel, the country’s most popular fuel, before it rises again toward the end of the year amid crop harvesting and festivals.

“Sales volume of petrol has already crossed pre-Covid levels, with diesel likely to reach there in the next two to three months” said Shrikant Madhav Vaidya, chairman of Indian Oil Corp., the country’s biggest refiner.

Refining Ramp-Up

Indian processors will have “limited upside potential” for run rate increases this month as they struggle to cope with excess diesel that’s been produced from the process of making gasoline, said Senthil Kumaran, head of South Asia oil at industry consultant FGE. A turning point may come around October, with runs potentially rising above 5 million barrels a day by year-end, he said.

Chinese run rates have inched up with state-owned Sinopec refining the most crude in 11 months in August, data from local consultancy SCI99 show. However, activity at private refiners in Shandong province is only just over 70% amid a government-led clampdown on the sector.

Still, with some of Asia’s largest economies reporting tens of thousands of virus infections per day, some threats to energy demand remain even as the region races to vaccinate its people.

“Resurgence risk is a concern that we have built into our outlook, particularly for populous countries such as India and Indonesia,” said Qiaoling Chen, an analyst at energy consultancy firm Wood Mackenzie Ltd. “For now, the worst for Asia oil demand is over, but the downside risks remain.”