According to reports, crude oil buyers in Asia are purchasing distressed cargoes of oil from Africa to the Middle East. This is a sign that the oil market is gradually reshaping and demand is coming back in the biggest crude-importing continent.

Indian, Chinese and South Korean refiners have reportedly either been snapping up distressed cargoes that were already being stored at sea near Singapore, or crude scheduled to load in June, according to traders and refinery executives.

Indian Oil Corporation Limited, commonly known as India Oil, which is the country’s biggest refiner, has reportedly been the biggest buyer of these cargoes. The OPEC+ cut agreement will reduce the normal amount of crude that these countries buy, so the purchases are being made to meet up with the various countries’ rising local demands.

The gradual rise in demand and rise in oil price can be attributed to the gradual easing of lockdown restrictions globally, particularly across the Asian continent. The storages that have been filled up with unsold crude during the global low demand and relatively low oil prices earlier in the year are gradually being freed. China is one of the countries that took advantage of the very low prices and purchased in bulk from distressed buyers.

According to traders who took part in the purchases, the International Oil Company bought the TEN Blend, Agbami, Brass Island and Bonga grades from majors late last week and bought WTI Midland, Murban and Upper Zakum in an earlier tender. Northeast Asian buyers are also said to have purchased cargoes, with South Korean refiners taking crude from Abu Dhabi and buying their preferred grades.

This is a piece of good news for African oil exporters, Nigeria, Angola, Algeria and others. The Asian market has the biggest buyers of African crude oil, and the need for crude in these countries will mean an increase in demand for African sellers. Even though prices have still not risen to normal levels pre-COVID-19, and may take a while to return to normal due to the production cuts among oil-producing nations, a gradual increase in demand will increase the supply rate and help to expedite the recovery of the global oil market.