Refinery throughput at the world’s top crude oil importer, China, slumped by 6.5% in August from a year earlier and remained close to the levels from July 2022, which saw the lowest refinery runs since the height of the pandemic in 2020.
In August, China's refinery crude throughput was at 12.64 million barrels per day (bpd), down by 6.5% compared to August 2021, and only slightly higher than the 12.53 million bpd in July 2022, per Reuters calculations based on volumes in tons released by China’s National Bureau of Statistics (NBS) on Friday.
Crude throughput at Chinese refineries slumped in July to the lowest level since the height of the pandemic in March 2020, amid unplanned facility outages and lower processing rates at independent refiners due to declining refining margins.
In August, unplanned outages at some Chinese refineries weighed on refinery runs, but so did weak fuel demand amid snap lockdowns as Chinese authorities continue with their “zero Covid” policy.
In addition, refinery output at China’s independent refiners also dropped with falling refining margins and the planned launch of a new round of tax probes on those private refiners, the so-called teapots. The independent refiners in China, mostly located in the eastern province of Shandong, account for around a fifth of all Chinese crude imports.
Year to date through August, refinery throughput was equivalent to around 13.06 million bpd, down by 6.3% compared to the first eight months of last year, per official Chinese data in tons crunched by Reuters.
Earlier this week, reports emerged that China could soon issue a new batch of fuel export quotas for its refiners, which could raise crude throughput and boost Chinese crude imports.
Refiners have applied for 15 million tons in new export quotas for fuels, including diesel and gasoline, Bloomberg reported on Thursday, citing sources with knowledge of the matter. If Chinese authorities decide to grant the asked quota volumes, the total Chinese quota so far this year would rise to the level of the whole of 2021 and would mark a U-turn in export quota policies of recent months.
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.