China's fuel inventories hit over decade lows, raising concerns over comeback of export curbs
BEIJING: China’s gasoline and diesel inventories have fallen to their lowest levels in more than a decade as exports surge and domestic demand recovers seasonally, according to GL Consulting.
In recent months, China's gasoline and diesel inventories have plummeted to their lowest points in over a decade, according to GL Consulting, a commodity information provider. This decline has occurred alongside a surge in exports and a seasonal recovery in domestic demand, raising concerns within the Chinese government, as reported by Rystad Energy.
GL Consulting anticipates a decline in exports during October as state refiners prioritize domestic energy security. Notably, commercial gasoline inventories have reached their lowest level since 2011, while diesel inventories have fallen to their lowest since 2015. China does not publicly disclose fuel inventory data; however, GL Consulting's records date back to 2011.
China, the world's largest crude oil importer, has reduced refinery throughput by seven percent this year due to supply disruptions, leading state refiners to cut runs and Beijing imposing fuel export restrictions in mid-March. However, China has eased the export restrictions since mid-July, with exports rebounding to prewar levels in August and expected to maintain their strong momentum in September. This recovery has generated windfall profits for refiners and supported higher refinery runs.
As of now, China has not released its October fuel export plan to refiners. Some analysts have lowered their estimates for China's fourth-quarter crude imports due to intensifying Middle East supply disruptions, expecting current refinery run rates to be unsustainable. Energy Aspects has reduced its forecast for China's fourth-quarter crude imports to 9.2 million barrels per day, while Rystad Energy has lowered its fourth-quarter refinery throughput forecast by 880,000 barrels per day to 13.9 million bpd.
High crude costs are compelling independent refiners to trim their run rates. State-owned refiners, entering their maintenance season, cannot fully compensate for the production shortfall. Tighter export restrictions would entail forgoing attractive export margins, but China must ensure domestic supply security.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
