China’s top oil refiners are turning to overseas markets to offset weak domestic demand, pushing ahead with refined product exports despite planned maintenance and uneven profitability, according to new market data.
Planned exports for May are set at 304,700 tons, a slight 2.4% decrease from April, driven by lower gasoline and aviation kerosene volumes. Diesel exports, however, are set to rebound, supported by improving margins and a shift toward clean fuel output, Quantum Commodity Intelligence reported on Thursday.
Behind this pivot lies a sluggish domestic market. Apparent consumption of refined oil products in April totaled 34.5 million tons, marking just a 0.9% year-over-year increase, according to Chinese data. The demand growth is markedly slower than the 1.6% rate seen in April 2024. Gasoline consumption continues to erode, pressured by the rapid adoption of new energy vehicles (NEVs), while diesel consumption fell 2.86%, hurt by cooling industrial and agricultural activity.
Even with April’s negative export margins for gasoline and diesel, falling crude oil prices have improved crack spreads significantly. As of May 9, the gasoline crack stood at 1,300 RMB/ton and diesel at 964 RMB/ton, encouraging refiners to push product abroad.
Major players are adapting fast. Chinese state-run Sinopec is fine-tuning its output to favor high-margin exports. PetroChina is focusing on clean fuel structure, while Hengli Petrochemical, backed by Saudi Aramco, is leveraging its integrated production base to scale exports, according to Chinese analysts.
In April, Singapore remained the top gasoline export destination, taking in 674,100 tons, while exports to Malaysia plunged 74.83% amid softening demand linked to U.S. tariff concerns. Gasoline exports to Singapore for March 2025 were approximately 710,000 metric tons, according to QCI.
Refiners, now operating with improved margins and underutilized domestic channels, are expected to keep leaning into global markets.
By Charles Kennedy for Oilprice.com
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