Chinese refiners have significantly increased their diesel exports this year, with a 197.2% surge in exports between January and August compared to the same period last year. This jump in diesel exports is attributed to export quotas and rising refining margins in Asia, which have provided incentives amid weakening domestic diesel demand. In August alone, Chinese diesel exports saw a year-on-year growth of 51.5%, according to official Chinese data. Additionally, exports of gasoline and jet fuel also experienced significant increases in August and the first eight months of the year, as refining margins in the region soared.
Refiners in China have ramped up crude oil processing to record levels in August, reaching 15.23 million barrels per day (bpd), due to high margins on the export markets and peak domestic summer demand. This represents an annual increase of 19.6% compared to August 2022. Refinery throughput for the first eight months of the year increased by 11.9% year-over-year to 14.76 million bpd. The surge in refinery runs in August is attributed to peak summer travel demand in China and higher volumes of fuel exports.
China also witnessed a spike in crude oil imports in August, with a 20.9% increase compared to July, and a 30.9% increase compared to August 2022. This resulted in the third-highest monthly crude oil volumes ever imported by China. The increase in imports is part of China’s strategy to capture strong margins abroad and utilize additional export quotas.
Overall, the surge in Chinese fuel exports, particularly diesel, is a result of favorable refining margins and slowing domestic demand. As China continues to prioritize refining activities, its role as a significant player in the global energy market is reinforced.
Sources:
– General Administration of Customs data
– Reuters estimates
– Chinese customs data