China processed record amounts of crude oil in 2021 to meet rising domestic consumption, but exported less petrol and diesel in the second half of the year to ensure domestic supply needs.
According to China’s National Bureau of Statistics (NBS), China processed a record 14 million barrels per day (b/d) of crude oil in 2021, a 4.6% increase from 2020.
Crude oil processing in China was particularly high in the first half of 2021, in response to high demand both domestically and elsewhere in Asia.
Despite more refinery capacity, crude oil processing decreased by 400,000 b/d in the second half of 2021 compared with the first half.
“China’s crude oil processing has also declined because relatively high crude oil prices are making importing crude oil more expensive,” said Jimmy Troderman, an economist with US Energy Information Administration (IEA).
Covid-19 Outbreaks in China
Beginning in August 2021, several Covid-19 outbreaks in China led to mobility restrictions, which in turn reduced domestic demand for petroleum products.
In addition, China’s refiners met their petroleum product export quotas in the first half of the year.
“They were not granted a second batch of export quotas until August, and those quotas were relatively low,” Troderman added.
These quotas set the maximum amounts of each product that refiners can export and are disseminated on a rolling basis.
“Low petroleum product exports have continued into 2022 because China’s first batch of export quotas in 2022 were 56% lower than its first batch in 2021,” he added.
Because of these quotas, in February 2022, China exported the lowest amount of diesel since early 2015, NBS and IEA data show.
- George Russell