(The views expressed here are those of the author, a columnist for Reuters.)

LAUNCESTON, Australia  - Asia's crude oil imports dropped in 2024, the first annual decline in three years, led by weak demand from heavyweight China and other major buyers, with only India managing sparse growth.

The world's top importing region saw arrivals of 26.51 million barrels per day (bpd) in 2024, down 1.4% from the 26.88 million bpd in 2023, according to data compiled by LSEG Oil Research.

The decline of 370,000 bpd this year marked the first time Asia's crude imports have dropped since 2021, when China's strict lockdown to combat COVID-19 cut demand in the world's biggest oil importer.

It was largely a China story again in 2024, with imports likely to have dropped by about 1.9%, or 210,000 bpd, according to official data for the first 11 months of the year and LSEG's estimate for December arrivals.

For the first 11 months of the year China imported 11.02 million bpd, according to customs data, while LSEG estimated December arrivals at 11.63 million.

If the official number for December is in line with the LSEG estimate, it would mean China's 2024 imports were about 11.07 million bpd, down from the customs figure of 11.28 million bpd for 2023.

The weakness in China's crude oil imports has several drivers, including slower economic growth, increasing adoption of electric vehicles and switching trucking to liquefied natural gas.

The question for the market is whether these trends are likely to reverse in 2025, or if China's crude oil imports have likely peaked and will decline again this year.

It's hard to see China's rapid move to EVs for light transportation being scaled back, and as long as LNG prices remain competitive with diesel, it's also hard to see diesel demand rising.

That leaves stronger economic growth as the most likely driver of increased crude demand in China, and that remains uncertain given the likelihood of rising trade tensions with the incoming U.S. administration of President-elect Donald Trump.

The International Energy Agency does expect China's oil demand to rise in 2025 by 220,000 bpd as Beijing's stimulus efforts finally result in a stronger economy.

But that forecast is likely dependent on China successfully navigating any trade tensions with the Trump administration, and whether this actually turns out to be the case is highly uncertain.

With a cloud hanging over China, can the rest of Asia provide some hope for crude oil exporters?

INDIA HOPE

India, the continent's second-biggest oil importer, is on track to have recorded modest growth in arrivals in 2024, with LSEG data suggesting an increase of around 2.3%, or just over 100,000 bpd, from 2023.

It's likely that India's crude imports will rise in 2025, largely due to the South Asian nation increasing refining capacity.

However, it's also possible that much of the lift in crude imports will be exported as refined fuels, rather than being used to satisfy domestic consumption.

Asia's third- and fourth-ranked importers, South Korea and Japan, are likely to have both recorded small declines in crude imports in 2024, largely reflecting soft economic growth.

Given that both South Korea and Japan are exposed to any new trade barriers erected by the United States, it's hard to make a case they will post strong economic growth in 2025, meaning their crude imports are likely to be steady at best.

The key theme emerging for 2025 for Asia's oil imports is uncertainty, and it will likely take clarity on what the Trump administration actually does before the picture becomes clearer.

The one factor that would no doubt help lift Asia's oil imports would be cheaper prices, but so far members of the OPEC+ group of exporters show no inclination to abandon their policy of restricting output.

This discipline has kept global benchmark Brent futures above $70 a barrel for three years, apart from two days in September last year when the contract briefly dipped below that level.

The views expressed here are those of the author, a columnist for Reuters.

(Editing by Jamie Freed)