China Lifts Fuel Export Curbs as Refiners Ramp Up Overseas Shipments

China has lifted restrictions on the exports of refined fuels, allowing state-owned refiners to resume shipments overseas this month, as well as one private refiner, Reuters reported today, citing unnamed sources.

For the private refiner, a company majority owned by Rongsheng Petrochemical, this would be the first month of exports after a four-month pause. State-owned refiners were allowed to sell fuels abroad, even with restrictions.

According to the Reuters sources, following the removal of the restrictions, Chinese refiners are planning to export about 3 million metric tons of gasoline, diesel fuel, and jet fuel this month. It remains to be seen whether the removal of the restrictions would be extended to August. The estimated total in fuel exports for the month is in line with fuel exports from China a year ago.

In June, reports said that China would allow state-owned refiners to export 800,000 tons of refined fuels this month. That compared with an estimated total export volume of about 600,000 tons for June.

Days after the conflict in the Middle East erupted and led to the closure of the Strait of Hormuz, the Chinese government moved to ban all fuel exports amid a worsening supply crunch, with the exception of some volumes shipping out to certain countries in Southeast Asia.

At the time, China told energy companies to suspend new fuel export contracts and try to cancel already arranged fuel shipments abroad as global fuel markets tightened amid the Middle Eastern war that effectively froze most traffic through one of the world’s biggest oil and fuel chokepoints.

In April, China eased the export restrictions as domestic fuel stockpiles soared, quelling concern about the security of fuel supply for the domestic market, thanks in no small part to China’s record stockpile of crude oil, estimated at over a billion barrels at the start of the Middle East war.

By Irina Slav for Oilprice.com

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