India and China Absorb Excess Middle Eastern Crude Amid Global Supply Glut

Asian refiners provided much-needed relief to a beleaguered oil market as China and India stepped up crude purchases in early November. Buyers cleared backlogged Middle Eastern cargoes that had accumulated during October's turbulent trading cycle, with Chinese processors taking Upper Zakum shipments from the UAE while Indian refiners absorbed remaining Kuwaiti barrels.

The demand uptick comes against a grim macroeconomic backdrop. Brent crude has plunged 15% year-to-date, hovering NEAR the bottom of 2025's commodity performance rankings. OPEC+ quota increases and non-OPEC production growth have created what the IEA warns could become a record supply glut. US futures markets reflected the weakness, with the nearest contracts slipping into contango—a bearish structure indicating oversupply.

Geopolitical factors compounded market pressures. Washington's escalating sanctions enforcement on Russian crude flows targeted major suppliers Rosneft and Lukoil, further disrupting traditional trade patterns. The demand resurgence from Asia's two largest oil importers offered temporary reprieve to Middle Eastern producers who had been struggling with excess shipments, particularly from the UAE and Kuwait following operational issues at the Al-Zour refinery.