• 4 minutes China 2019 - Orwell was 35 years out
  • 7 minutes Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 11 minutes Trump will capitulate on the trade war
  • 14 minutes Glory to Hong Kong
  • 37 mins China's Blueprint For Global Power
  • 2 hours Bloomberg: shale slowing. Third wave of shale coming.
  • 49 mins ABC of Brexit, economy wise, where to find sites, links to articles ?
  • 2 hours Yesterday Angela Merkel stopped Trump technology war on China – the moral of the story is do not eavesdrop on ladies with high ethical standards
  • 4 hours Brexit agreement
  • 6 mins Disenfranchised people are angry people - map of global electoral systems
  • 13 hours Boring! See Ya Clowns, And Have Fun In Germany
  • 52 mins Erdogan Holds All The Cards ... 3.6 Million Of Them
  • 2 hours Spain Is On The Edge...Clashes Between Catalonia And "Madrid"
  • 16 hours the future
  • 13 hours 5 Tweets That Change The World?
  • 12 hours USA Carried Out Secret Cyber Strike On Iran In Wake Of Saudi Oil Attack
  • 13 hours Leftists crying to make oil patch illegal friendly: 'Broken system' starves U.S. oil boom of immigrant workers: CONGRESS DO YOUR JOBS INSTEAD OF PANDERING!
Alt Text

China Makes A Move On OPEC's No.2

China has refocused its attention…

Alt Text

Asia’s Top Refiner Hit Hard By Iran Sanctions

The largest oil refiner in…

Alt Text

Oil Prices Jump On A Lone Piece Of Bullish News

Oil prices rose on Wednesday…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Premium Content

The Next Big Threat For Chinese Oil Demand

A Bloomberg article about electric buses in China is getting a good amount of mileage (sorry), and rightly so, given its detrimental impact on product demand (hark, ~70kbd this year). While China increases its focus on electric vehicles and takes aim at fuel emissions, it is also becoming a bigger player in the global fuels market, as exports increase amid higher domestic refining activity.

China has been a net exporter of refined products for the past seven consecutive months, with a record pace of refinery runs leaving more available for export.

Here at the good ship Clipper, we have a partnership with Ursa, combining our flows data and their monitoring of inventories via satellite imagery to estimate Chinese refinery runs. We saw refinery runs hitting a record last month, and correspondingly net exports also reached a record:

(Click to enlarge)

Subsequently, official Chinese data affirmed this record pace; based on our data, we expect April's rate to be similarly impressive.

The vast majority of product exports (~85 percent) remain within Asia, but we are seeing consistent deliveries further afield. The U.S. is one such destination, with jet fuel delivered to the U.S. West Coast in twelve of the last sixteen months. Deliveries to the Atlantic Coast are more rare, but we have seen a few deliveries of kerosene.

Our ClipperData show that the vast majority of Chinese refined products into the U.S. are middle distillates, although 302,000 bbls of CBOB was discharged at BP's Portland terminal in Oregon late last month.

(Click to enlarge)

While refining activity and product exports rise, China is increasingly trying to keep domestic fuel emissions at bay. This recent article from The Economist highlights one way the Chinese government is using to cut down on pollution: license plates.

License plate lotteries exist across a number of Chinese cities, aimed at reining in both pollution and congestion. But the odds ain't good. In Beijing, the chance of winning one of the bi-monthly lotteries has dropped from 6 percent in 2011 to just 0.2 percent this year, given rising participation. Related: China’s Oil Futures Are Gaining Momentum

Shanghai has been particularly shrewd, splitting its license plate allocations betwixt a lottery and an online auction. The city raised 12 billion yuan from auctions last year - accounting for 2 percent of its total revenues. With winning bids averaging 88,176 yuan ($14,022), in some instances, license plates ended up costing more than the cars themselves.



Back to them buses, and it is estimated that electric buses are displacing around 70,000 bpd of global fuel demand this year, with that number set to rise in the coming years as the fleet grows.

China is leading the charge, accounting for about 99 percent of the 385,000 electric buses on the roads worldwide last year. Chinese cities are adding 9,500 buses every five weeks, the equivalent of London’s entire working fleet. Given the buses consume ~30 times more fuel than a car, their impact on fuel demand is much greater than individual vehicles.

On this basis, electrification of the transportation sector is going to continue nibbling away at global product demand, taking increasingly bigger bites.

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Tom on April 30 2018 said:
    Matt, thank you for the very interesting article.

    9,500 new busses every 5 weeks is 1,900 a week or about 271 a day. Sounds huge but I guess is believable. The 30 to 1 ratio of fuel usage to cars is very interesting.

    Thanks Matt!
  • snoopyloopy on April 30 2018 said:
    Deliveries are just getting started in the US and Europe, but demand will almost certainly and quickly rise quite high in short order. Better get out while it can be done.
  • Ice Berg on April 30 2018 said:
    Thay say that the Captain of the Titanic repeatedly ignored warnings about Icebergs in the area. Instead he ordered "full speed ahead".

    Seems very similar to the oil industry of today. Story after story talks about electric vehicles used to achieve reduced emissions. You would think that the oil industry would be listening. But they are Not.

    Their Captain, Scott Pruitt at the EPA, is ordering "Full Speed Ahead" for dirty fuels, by handing out waivers to refiners to ignore ethanol. Ethanol reduces auto emissions, but Pruitt doesn't care. Its full speed ahead with dirty benzene laced fuels.

    Who's afraid of a few icebergs?
  • Joe on April 30 2018 said:
    The growth in the number of electric bus is very impressive (even electrifying), but the power to charge them overnight is coming mostly from coal powered power plants, so really, they are doing a good job at lowering bus engine emissions in the heavily polluted cities where the buses are, but are increasing the coal combustion emissions out in the countryside. Of course burning natural gas to produce electricity will help but coal still rules in the world of power in China. I guess you have to start somewhere.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play