• 5 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 7 minutes Can LNG Kill Oil?
  • 8 minutes Question: Why are oil futures so low through 2020?
  • 11 minutes US Shale: Technology
  • 8 hours “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 2 hours CoV-19: China, WHO, myth vs fact
  • 2 hours Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 13 hours Blowout videos
  • 3 hours Has Trump put the USA at the service of Israel?
  • 17 hours Democrats Plan "B" Bloomberg Implodes. Plan "C" = John Kerry ?
  • 3 hours Oil Stocks
  • 2 days Question - What if there are no buyers for Chevron's Appalachia Assets?
  • 2 hours Foxconn cancelled the reopening of their mfg plants scheduled for tomorrow. Rescheduled to March 3rd. . . . if they're lucky.
  • 2 days Natural Gas
  • 2 days Cheap natural gas is making it very hard to go green
  • 2 days Energy from thin air?
Real Energy Independence Is An Illusion

Real Energy Independence Is An Illusion

The illusion of energy independence…

Two Abundant Elements That Could Create A Superbattery

Two Abundant Elements That Could Create A Superbattery

Generating electricity from thin air…

Crude Oil Imports At China’s Independent Refiners Rebound

pipeline gauge

Following four consecutive months of declining oil imports, China’s independent refiners boosted crude oil imports in August by 40 percent from July, as many returned from maintenance to prepare for winter fuel demand amid recovering refining margins, according to data by Thomson Reuters Oil Research and Forecasts.

Crude oil imports for Chinese independent refiners—the so-called teapots—have averaged 1.4 million bpd so far in August, up by 40 percent compared to July and up by 10 percent from August last year, Thomson Reuters Oil Research reported.

For now, this rebound in imports could ease concerns that slumping teapot imports, which represent around one-fifth of China’s total crude oil imports—could affect oil demand in the world’s biggest oil-importing country.

Under the stricter tax regulations and reporting mechanisms effective March 1, the teapots can no longer avoid paying consumption taxes on refined oil product sales—as they have over the past three years. In other words, their profit bonanza is coming to an end.

Despite ample government-approved crude import quotas, independent refiners have started losing money on refining, prompting a cut in utilization rates and closures for maintenance in order to reduce exposure to unfavorable market conditions.

With higher oil prices this year and the taxes, the teapots are expected to reduce their imports, threatening China’s oil demand growth, and ultimately, global oil demand growth.

Now many teapots are back from maintenance, and during the extended period of shutdowns the Chinese diesel and gasoline glut was erased, boosting fuel prices and improving refining margins.

The higher oil product prices encouraged more independent refiners to come back from maintenance, a manager at a Dongying-based teapot refiner told Reuters, noting that the refiner he works with finally managed to book a small profit in August.

Analysts who spoke to Reuters expect crude oil demand next month to further firm up, as the teapots will be preparing to boost fuel production in Q4.

However, executives warn that teapot profits--if any--are still looking slim this year, and some smaller, poorly-managed independent refiners might go out of business, while the larger players are expected to survive.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage


Leave a comment
  • Mamdouh G Salameh on August 29 2018 said:
    While Chinese independent refiners known as teapots account for 20% of China’s total oil imports, any reduction of oil imports by them due to lower margins will be supplanted by the much bigger government-owned refineries and therefore will not have any impact on China’s overall crude oil imports.

    China’s oil demand is growing by 4% this year and is projected to top 10 million barrels a day (mbd) buoyed by an economic growth averaging 6.7% this year.

    Furthermore, China’s imports of Iranian crude could be projected to increase significantly this year if the escalation of the trade war between China and the US continues. As a retaliation against US tariffs, China could easily drop any imports of US oil.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News