Beijing August 15 2022: China’s fuel product exports will rebound in August to near the highest for the year so far after Beijing issued more quotas in June and July, although broader curbs are set to cap shipments at seven-year lows for 2022, analysts and traders said.
The rebound in fuel exports from China, the world’s second-biggest producer of refined fuels, has helped cool global prices that hit record highs in May and June as western sanctions on Russia following the Ukraine war tightened global markets.
Shipments are expected to level off over the rest of the year, however, as Beijing prioritises the local market to curb domestic fuel inflation. Diesel, gasoline and jet fuel exports for the year are expected to be as much as 40% lower from 2021.
With the drop-off in China – once Asia’s top gasoline exporter and a key diesel supplier – fuel importers will have to rely on South Korea, India and the Middle East, analysts said.
“With China staying in a scale-back mode so far, it is certainly an opportunity for export-oriented refiners in the rest of Asia and Middle East to supply the shorts in Europe and U.S.,” said Mukesh Sadhav, head of downstream and oil trading at consultancy Rystad Energy.
Asian refiners outside China are expected to raise their crude throughput 10%-15% this year from 2021, while China’s output may be flat as a rebound in the second half offsets a rare decline in the first six months of the year, Sadhav said.
