New Delhi: Asia may conclude 2022 with a steep reduction in crude inflows from Africa due to higher freight rates, a wider Brent-Dubai gap, and more competition from European refiners looking for alternatives to Russian-created barriers, according to S&P Global Commodity Insights.

“The widening Brent-Dubai spread, and high freight rates have dampened the attractiveness of Asia’s import of African crudes to the region,” said Lim Jit Yang, advisor for Asia-Pacific oil markets at S&P Global.

The rivalry from European refiners has intensified, he continued, as they switch from Russian crudes to alternative crudes like African grades. This trend is certain to continue until the EU’s sanctions take effect in early December.

China, who consumes the most oil in Asia, has actively procured cargoes from a variety of suppliers to profit from the broad price volatility.

China’s crude imports from Africa plummeted by 22.6% year on year to 1.06 million b/d in the January-September period. As a result, the region’s market share decreased from 13.2% a year earlier to 10.7% in the nine-month period, as per data from the country’s General Administration of Customs.

According to S&P Global, the country’s independent refineries were the primary contributors to the drop in African volumes, as they switched to more attractively priced crudes from not just Russia, but also cargoes from Iran and Venezuela.

Crude imports from Angola fell 59.4%, or 160,000 b/d, year on year, to 109,000 b/d in the first nine months of this year. The GAC statistics revealed that over the same nine-month period, China’s overall crude imports from the same African supplier decreased by 155,000 b/d to 630,000 b/d.\

“The growing share of Russian crudes in India’s import basket, a tighter market structure, as well as increased volatility in freight markets pulled down the share of West African crudes over January-September 2021 from 12.5% to 8.4% in the same 2022 period,” said Shreyans Baid, senior oil analyst for South Asia at S&P Global.