A Chinese move could increase the price of diesel fuel
China may not allow additional fuel export quotas this year, which could further increase diesel prices globally amid limited supplies and an as yet unknown duration of the Russian export ban currently in place.
Chinese authorities have already told major oil refiners in the world's top crude importer not to rely on additional fuel export quotas for the rest of the year, they told Bloomberg with knowledge of the situation on Thursday.
So far this year, China has issued three sets of fuel export quotas to its major refiners, which are allowed to export diesel, gasoline and jet fuel.
In late August, in the third batch of allocations for 2023, China issued a larger-than-expected fuel export quota, in an effort to incentivize refiners to support economic growth and sell more product abroad at a time where Chinese fuel demand for 2023 may have peaked.
The third batch of export quotas brought total quota volumes for 2023 above the quotas allocated for the whole of 2022, Bloomberg estimates.
While a fourth batch of fuel export quotas is not expected this year, China is set to increase its fuel exports in October , thanks to rising refining margins and international demand for jet fuel, they said analysts and industry sources told Reuters earlier this week.
China's exports of refined petroleum products are set to rise in October compared to September, with gasoline and jet fuel posting the biggest month-on-month increases, according to industry estimates compiled by Reuters.
Sun Jianan, an analyst at Energy Aspects, told Reuters that October's increase in exports could also be due to refiners expecting another round of export permits.
Chinese refiners have tripled diesel exports so far this year, as export quotas and rising refining margins in Asia have proved sufficient incentives amid tepid domestic demand. However, the fact that, at this point, no further increase is expected means that there will not be a "Chinese Reserve" in the event of an explosion in the price of diesel. An additional threat to growth.
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The article A Chinese move could increase the price of diesel fuel comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/una-mossa-cinese-potrebbe-far-aumentare-il-prezzo-del-carburante-diesel/ on Fri, 29 Sep 2023 05:30:19 +0000.