• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 19 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 1 day America should go after China but it should be done in a wise way.
  • 7 days China is using Chinese Names of Cities on their Border with Russia.
  • 8 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 8 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 8 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 7 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 8 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 9 days United States LNG Exports Reach Third Place
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs

China's Largest Fuel Export Quota Of 2022 Could Spark Oil Demand Growth

Global oil demand could soon pick up pace after the world’s top crude oil importer, China, issued its biggest fuel export quotas to its refiners for this year.  

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, Bloomberg reported on Friday, citing industry consultancy group JLC.

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.

The new fuel export quota takes the combined full-year 2022 quotas to 37.25 million tons, per JLC estimates. This is in line with the 2021 full-year fuel export allocations of 37.61 million tons.

China has also issued a small amount of crude oil import quotas to its independent refiners, the so-called teapots, in the Shandong province, according to JLC.  

China started this year by considerably reducing the allowances for fuel exports in the first export quota batch for 2022, signaling its intention to limit fuel sales abroad and curb excessive refinery output.  

But the latest fuel export allowances signal that China will seek to revive its economy, giving refiners more quotas to export fuels and potentially lifting refinery run rates.

The new export allowances are bullish for the Chinese and global oil demand, as well as for oil prices, which have suffered in the past quarter from intensifying fears of recession and a possible hit to oil demand.  

Earlier this week, Chinese industry officials said that China’s oil demand was set for recovery after the end of the COVID restrictions.

On the other hand, more exports of fuels from China could alleviate the product market globally ahead of the EU embargo on imports by sea of Russian crude and refined products. However, refining margins in Asia would be dragged down, as evidenced in today’s slump in the benchmark profit margin by $2 per barrel, as estimated by Bloomberg.

ADVERTISEMENT

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh Salameh on September 30 2022 said:
    By issuing its biggest fuel export quotas and allocating 15 million tons (110 million barrels of oil) for them, China is signalling that it is getting out of the restrictive lockdowns and is open for business.

    In addition to crude oil imports which China issued to its independent refiners, the so-called teapots, this will have a very bullish impact on the global economy, global oil demand and prices.

    I project that oil prices will soon resume their surge with Brent crude hitting $100-$110 before the end of this year. However Brent crude could even go higher to $110-$115 if the EU and the United States go ahead with their proposed capping of the price of Russian crude exports.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News