Increased fuel export quotas and robust export demand pushed China's overseas shipments of refined products surging by 36% annually in September, to the highest level since June last year, official Chinese data showed on Monday.
China, however, saw its crude oil imports drop by 2% year over year in September, to around 9.79 million barrels per day (bpd), according to data from the Chinese General Administration of Customs cited by Reuters.
Yet, the crude import volumes were higher than the August 2022 intake of 9.5 million bpd, the data showed.
Tepid domestic demand and weakening margins have prompted independent refiners, the so-called teapots, to keep fuel processing rates reduced.
However, thanks to large state refiners back online after planned maintenance, refinery output in China saw its first year-on-year increase since November last year. According to data from the National Bureau of Statistics, cited by Reuters on Monday, refinery output in China was up by 1.9% in September compared to the same month of 2021, and stood at around 13.82 million bpd. That was much higher than refinery production of 12.64 million bpd in August 2022.
The highest exports of fuels in September in 15 months come just as China issued its biggest fuel export quotas to its refiners for this year at the end of September. Chinese authorities have allocated 15 million tons of new fuel export quotas to its major refiners, and the quota could be rolled over into early next year.
The fresh batch of fuel export quotas was widely expected in a move seen as an attempt from China to revive its economic activity, which has suffered from snap COVID lockdowns and a real estate crisis since the spring.
At the same time, Asian fuel sellers are said to be increasing their shipments of diesel to energy-starved Europe, benefiting from the premium European buyers are willing to pay for the fuel amid a deepening global and regional deficit.
By Tsvetana Paraskova for Oilprice.com
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