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China Issues Second Batch Of Oil Import Quotas For 2017

Teapots

China has allowed a second batch of crude oil import quotas for independent refiners and some state-held companies for 2017, setting full-year quotas at a total of 91.73 million tons, or 1.83 million bpd, according to a document by China’s Ministry of Commerce obtained by Reuters.

In January this year, China issued the first batch of quotas for non-state refiners, which totaled 68.81 million tons, refining sources told Reuters back then. As many as 29 companies, including independent refiners—the so-called teapots—and trading firms, were granted quotas, the refining sources noted, quoting an official document by the Chinese authorities.

Late last year, China’s Ministry of Commerce had said that the quota for non-state refiners would be kept at 87.6 million tons, or 1.75 million bpd this year, flat compared to 2016.

Now the second batch of the 2017 import quotas is set at 22.92 million tons, and included three more companies to refiners issued quotas to import crude oil, according to the document Reuters has seen.

Representatives of five independent refiners told Reuters that they had been issued a second batch of import quotas.

Earlier this month, a group that represents most of the independent oil refiners in China issued a statement pledging the members’ full compliance with government regulation governing how these independents operate, so that they don’t trigger complaints from the state-owned giants.

Related: Are Russia And The Saudis Planning A Natural Gas Cartel?

The teapots have been instrumental for China’s crude oil demand growth during the oil price crisis, but have also undermined the dominance of the state-owned companies.

Among the requirements the teapots have promised to obey is the stipulation that no amount of imported crude—for which every teapot has a government-issued quota—shall be re-exported.

There are currently 28 independent refiners operating in China, and their imports between January and March 2017 represented 18 percent of the country’s total crude imports.

By Tsvetana Paraskova for Oilprice.com

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