Boom in fuel oil imports in China. Here’s why
Fuel oil imports into China increased 21% in January and February compared to the same months in 2023, according to data from China's General Administration of Customs released on Wednesday and carried by Reuters .
Fuel oil imports have surged in the world's top crude oil importer in recent months as independent refiners, so-called teapots based in the coastal province of Shandong, have increased their use of fuel oil as a cheaper feedstock.
At the end of last year, China's private refineries had lower crude oil import shares. Then, through the Shandong provincial government, they tried to obtain extra supplies of fuel oil, which is cheap and can be turned into diesel and gasoline.
Late last year, China awarded refiners an additional fuel oil import quota for 2023.
The trend of increasing fuel oil imports appears to have continued into early 2024, as Chinese imports increased 21% from a year earlier, reaching 3.59 million metric tons in January and February, according to official customs data.
January levels of fuel imports were higher than those of December 2023, but February imports fell compared to January 2024, due to the Lunar New Year holiday and higher fuel oil inventories, Reuters notes.
At the same time, China's marine fuel exports increased 2.1% in January-February compared to the same period in 2023, following a 3.2% year-on-year increase in full-year 2023 marine fuel exports , according to Chinese data. The use of bunker fuel has increased in recent months, due to the rerouting of many ships from the Red Sea and the Suez Canal due to Houthi attacks on commercial vessels in the area.
Last week, the International Energy Agency (IEA) raised its 2024 forecast for global oil demand growth by 110,000 barrels per day (bpd) from the February report.
The reasons for the upward revision of demand by the IEA are the improving outlook for US oil demand and the increase in demand for bunker fuel, due to disruptions in the flow of trade in the Red Sea, which have led many ship operators to choose the longer route between Europe and Asia via the Cape of Good Hope in Africa.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/boom-dellimport-di-olio-combustibile-in-cina-ecco-il-perche/ on Thu, 21 Mar 2024 07:00:38 +0000.