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Chinese exports of fuels jumped in December, with gasoline sales abroad matching an October 2020 record, following a huge export quota the authorities issued to refiners at the end of 2022.
Exports of gasoline hit 1.91 million tons last month, hitting the record level seen in October 2020, while diesel exports rose to the highest level since March 2021, at 2.79 million tons, per official Chinese data quoted by Bloomberg on Wednesday.
The high export levels in December were the result of the biggest batch of fuel export quotas issued for 2022 by authorities. China allocated 15 million tons of new fuel export quotas to its major refiners at the end of September. Exports were also high due to the still weak domestic demand as China started to ease the ‘zero Covid’ policy which led to a surge in infections.
China’s fuel exports in January, however, could be much lower than in December as refiners look to stock up on gasoline and diesel for domestic demand around the Lunar New Year on January 22, and meet expectations of rising demand at home after the Covid restrictions were lifted, analysts say.
Demand in China is expected to rebound in the coming months, analysts and forecasters say. The International Energy Agency (IEA), for example, said in its monthly Oil Market Report today that China’s reopening was set to drive global oil demand to a record high of 101.7 million barrels per day (bpd) this year, up by 1.9 million bpd from 2022. The IEA thus raised its demand growth estimate for 2023 by 200,000 bpd from 1.7 million bpd growth expected in December. Almost half of the oil demand growth this year will come from China, the IEA said in its closely-watched Oil Market Report (OMR) for January.
Chinese refiners also have a fresh batch of export quotas for 2023, which was increased by as much as 46% compared to the first batch issued for 2022.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.