• 4 minutes Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 8 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 11 minutes Why Trump Is Right to Re-Open the Economy
  • 13 minutes Its going to be an oil bloodbath
  • 1 min "Saudi Armada heading to U.S.", "Dumping" is a WTO VIOLATION.
  • 2 hours Cpt Lauren Dowsett
  • 3 mins Trump will be holding back funds that were going to W.H.O. Good move
  • 5 hours Death Match: Climate Change vs. Coronavirus
  • 41 mins Washington doctor removed from his post, over covid
  • 1 hour Which producers will shut in first?
  • 3 hours Free market or Freeloading off the work of others?
  • 4 hours ‘If it saves a life’: Power cut to 1.5 million Californians
  • 6 hours US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 8 hours Russia's Rosneft Oil is screwed if they have to shut down production as a result of glut.
  • 7 hours How to Create a Pandemic
  • 8 hours Ten days ago Trump sent New York Hydroxychloroquine. Being administered to infected. Covid deaths dropped last few days. Fewer on ventilators. Hydroxychloroquine "Cause and Effect" ?
Alt Text

OPEC Can’t Kill U.S. Shale

Saudi Arabia’s effort to crush…

Alt Text

OPEC And Partners Eye A 3-Month Output Cut

Countries part of the OPEC+…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

No Financing And No Demand: Chinese Refiners Run Into Trouble

International banks are suspending credit lines for some independent oil refiners worried about the growing risk of defaults across industries because of the coronavirus epidemic, Reuters reports, citing industry sources.

According to the sources, at least three private refiners, or teapots, have had credit lines to the tune of $600 million suspended by banks including French Natixis, Dutch ING, and Singapore DBS Group Holdings.

“All our applications for new open-account credits are frozen ... these clean credits are pivotal as we buy 6 to 8 million barrels of oil each month,” one source told Reuters.

Refiners, both private and state, have already reduced their run rates in response to the slump in fuel demand resulting from the outbreak, and now they have deepened these cuts, Bloomberg reported last week.

The average as of last Thursday was about 10 million bpd, down by 25 percent on the same time last year, when the average run rates were at a record high of close to 13 million bpd. Analysts expect the low run rates to continue at least until the end of this month, but if it spills into March, some refiners—notably independent refiners—will start experiencing a lack of storage space, too, after earlier this month they took advantage of low prices to stock up on crude.

Now, on top of that, the teapots that have accounted for a large portion of China’s increased thirst for oil that was instrumental in oil price recovery after the crisis, are having financing trouble.

“We were told by our banks that so long as the open-account credits are for oil heading to Shandong, it will be very hard chance winning approvals,” another Reuters source said.

The three refiners refused credit line extensions have combined oil import quotas of about 240,000 bpd, Reuters reports. If more banks become wary of defaults among refiners, this could hit imports over a longer term.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News