Asia driving crude oil tanker demand

Tonne-mile demand is a key metric in tanker shipping, capturing both the volume of cargo transported and the distance over which it is moved. This measure offers deeper insight into trade flows and vessel utilisation than cargo volume alone. The changes in tonne-mile demand between 2019 and 2024 in Asia illustrate shifting crude oil trade patterns, influenced by refining capacity expansions, geopolitical realignments, and economic developments.

China, long a dominant force in crude oil imports, saw an increase in tonne-mile demand from 685Bn cargo-miles in 2019 to 903Bn cargo-miles in 2024. This represents a 32% increase, reflecting the country’s growing refining sector and its drive for energy security through diversification of supply sources. The expansion of independent refiners, particularly in Shandong province, has driven greater demand for crude oil from distant suppliers, lengthening voyage distances.

South Korea, by contrast, saw a slight contraction in tonne-mile demand over the period, with figures declining from 1,338Bn cargo-miles in 2019 to 1,293Bn cargo-miles in 2024, a drop of just over 3%. This suggests a reorientation of crude sourcing towards suppliers in closer proximity, possibly driven by a preference for regional supply stability and cost considerations.

Japan recorded a more pronounced decline in tonne-mile demand, falling from 1,053Bn cargo-miles in 2019 to 822Bn cargo-miles in 2024, a reduction of over 21%. This downward shift aligns with broader trends in the country’s energy policy, which emphasises greater energy efficiency and a progressive move towards alternative fuels.

In contrast to these contractions, Singapore and Malaysia exhibited robust growth in tonne-mile demand. Singapore, a major refining and bunkering hub, saw its crude oil tonne-mile demand rise from 559Bn cargo-miles in 2019 to 875Bn cargo-miles in 2024, an increase of over 56%. This suggests that the city-state continues to solidify its role as a refining powerhouse, processing greater volumes of crude oil sourced from more distant suppliers. Similarly, Malaysia’s tonne-mile demand increased by 53% over the period, rising from 371Bn cargo-miles to 568Bn cargo-miles. This reflects expanding refining capacity and a stronger role in regional crude oil logistics.

The rise and fall of tonne-mile demand across these key markets highlight the interplay of trade policies, refining capacity, and shifting energy consumption patterns. The metric encapsulates not just demand for crude oil but also the evolving complexities of crude sourcing. Longer trade routes can mean higher freight costs, but they also signify greater supply diversification.