I think I was trying to express that in one of my responses.
To restate differently, we commonly say that loads where the current lags the voltage (inductive loads) 'consume' VARs, and that loads where the current leads the voltage (capacitive loads) 'supply' VARs.
In the case of the circulating currents, the current flows out of the 'top' of one winding, into the 'top' of the other winding, then out of the 'bottom' of the second winding and into the 'bottom' of the first winding. (Yes, the current is alternating....) The point being that the phase angle of the current referenced to one winding is always going to be 180 degrees out of phase as when referenced to the other winding.
This 180 degree phase difference is what means that one winding is supplying power to the circulating current, and one winding is consuming power from the circulating current. Similarly, if one winding is supplying inductive VARs to the circulating current the other winding must be consuming inductive VARs from the circulating current.
Note: I have nothing to say about how much power factor the circulating current will have. I simply don't know enough on that issue. I am simply talking about the VARs involved for any arbitrary power factor.
-Jon