Type to search

China Refiners Get Green Light to Boost Exports, Lift Economy

The increased quotas include 13.25 million tonnes of refined products – gasoline, diesel and aviation fuel

An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022. cnsphoto via REUTERS
An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China. Photo: Reuters


Chinese refiners are set to increase their exports of refined oil products after seeing their quotas hiked by Beijing.

Trade sources and analysts said on Monday the increases will come into effect in the last two months of 2022 and carry into early 2023.

The increase in Chinese exports is likely to help stabilise global oil markets and partly replace supplies from Russia which will be hit by European Union embargoes in coming months.

It also allows the world’s No2 refiner to tap excess refining capacity and boost exports when its economy is struggling for growth after narrowly avoiding a contraction in the second quarter and the decline in the yuan to a 14-year low.


Also on AF: Australia’s Coal, Gas Revenues Boost From Ukraine War


“A ramp-up in product exports from China will support energy-starved oil markets considerably as there are concerns about an impending EU embargo on Russian supplies,” said Sugandha Sachdeva, vice-president of commodity and currency research at Religare Broking.

Sachdeva said boosting exports amid waning consumption demand will also support the battered Chinese economy.

The quotas include 13.25 million tonnes of refined products – normally gasoline, diesel and aviation fuel – and 1.75 million tonnes of low-sulphur marine fuel.

The new issue, the single largest allotment of 2022, takes total allotments of diesel, gasoline and jet fuel combined for 2022 to 37.25 million tonnes, on par with 2021.


Freight Costs, Margins Impact

Between January and August, China exported about 16.4 million tonnes of refined fuel, which included 7.56 million tonnes of gasoline, 5.54 million tonnes of jet fuel and 3.25 million tonnes of diesel, customs data showed.    

Refiners would likely need to raise exports to near 2 million bpd over November and December to meet the allotments but high freight costs and weak gasoline export margins may prevent refiners from fully utilising the quotas by year-end, FGE said.

Citi analysts said Chinese monthly exports could double to 4-5 million tonnes in November-December.

Chinese refiners are also expected to ramp up diesel exports by the most because it has the highest profit compared with gasoline and jet fuel which could tighten domestic supplies, analysts said.


  • Reuters with additional editing by Sean O’Meara


Read more:

China Oil Refiners Prepare to Raise Output As Demand Lifts

China Oil Demand Plunge a ‘Watershed Moment’

China Oil Refiners Cash In as Beijing Grants New Export Quotas



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond