Despite the easing of the Chinese restrictions on fuel exports, shipments so far in May have been nearly half the volumes from before the Iran war, the Financial Times reports, citing data from Kpler.
Significantly lower Chinese gasoline, diesel, and jet fuel exports may not be enough to alleviate the fuel crisis in the rest of Asia, which is reeling from the worst oil supply shock in history.
China issues fuel export quotas for both state and independent refiners on a regular basis. State-owned energy companies get the bulk of these quotas.
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.
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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.
Last month, China eased the export restrictions as domestic fuel stockpiles soared.
But the state energy companies are now allowed to export much lower volumes than they did before the war.
So far in May, Chinese fuel exports have averaged 417,000 barrels per day (bpd), per the Kpler data cited by FT.
These compare to exports of around 750,000 bpd of jet fuel, diesel, and gasoline in January and February, before start of the war in Iran, which upended global crude and fuel markets.
China has managed the current oil crisis better than most Asian countries as it had accumulated a large stockpile of crude, while its own fuel demand has dropped, especially for road transportation, amid higher oil prices and continued growth of electric vehicle sales.
By Charles Kennedy for Oilprice.com
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