KUALA LUMPUR, June 8 (Bernama) -- Bursa Malaysia recorded a decline of 0.82 per cent at the close today with the diversified composition of the FTSE Bursa Malaysia KLCI (FBM KLCI) helping to cushion the impact of global market weakness. Global markets were jittery amid resurfacing geopolitical tensions in West Asia and heavy selling in global technology counters. At 5 pm, the FBM KLCI finished 13.91 points lower at 1,679.52 from last Friday's close of 1,693.43. The benchmark index opened 9.89 points weaker at 1,683.54 and traded between 1,676.95 and 1,684.14 throughout the session. Losers surpassed gainers in the broader market by 916 to 340, while 455 counters were unchanged, 964 untraded and 13 suspended.
The latest developments in oil markets point to a clear trend: China is buying less crude, raising concerns about demand strength in the world’s largest energy importer.
Chinese Refiners Cut Back on Purchases
China’s independent refiners who the main buyers of Iranian crude are reducing operating rates as profitability weakens.
Key pressures include:
- Negative refining margins
- Slower domestic fuel demand
- Ongoing economic headwinds
These factors are forcing refiners to cut crude intake, leading to a visible drop in demand.
Import Volumes Show Clear Decline
The slowdown is reflected in trade flows:
- Iranian crude shipments to China dropped to ~1.1 million barrels per day
- This is the lowest level since early 2025
Given that these refiners typically account for around 90% of Iran’s exports, the decline has a significant impact on global oil demand.
Rising Floating Storage Signals Oversupply
With demand weakening, excess crude is building up:
- Around 56 million barrels of Iranian oil are now stored at sea
- Most of the supply is concentrated near Singapore and Chinese waters
This points to a growing supply overhang driven by weaker Chinese buying.
Price Discounts Reflect Demand Weakness
Iranian crude is now being offered at a discount to Brent, reversing from a previous premium.
At the same time:
- Russian crude premiums have also narrowed
These pricing adjustments confirm that: Producers are lowering prices to respond to weaker demand from China
Policy Support May Be Easing
Beijing had earlier encouraged refiners to maintain production to support supply stability.
However:
- Continued losses are forcing more cautious operations
- Policy pressure appears to be loosening
This suggests that demand recovery may take time.
Investor Takeaways
- China’s oil demand is weakening, driven by poor refining margins and softer consumption.
- Lower import volumes and rising storage indicate demand slowdown is real.
- Oil price discounts are a result of weaker demand, not the cause.
- The trend is affecting both Iranian and Russian crude markets.
- China remains a key driver of global oil demand, making this slowdown critical for investors.
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