Chinese Oil Refineries Struggle With Outages, Weak Demand

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China’s National Bureau of Statistics (NBS) has reported that in August, China’s refinery throughput was at 12.64 million barrels per day (bpd), down by 6.5% compared to August 2021
Reports say the level remained close to the levels from July 2022, which saw the lowest refinery runs since the height of the pandemic in 2020, and only slightly higher than the 12.53 million bpd in July 2022, per Reuter’s calculations based on volumes in tons released.

throughput at Chinese refineries slumped in July to the lowest level since the height of the pandemic in March 2020, amid unplanned facility outages and lower processing rates at independent refiners due to declining refining margins.

Also Read: As Gas Price Soar, China Steps Up LNG Sales To Europe

In August, unplanned outages at some Chinese refineries weighed on refinery runs, but so did weak demand amid snap lockdowns as Chinese authorities continue with their “zero Covid” policy.

In addition, refinery output at China’s independent refiners also dropped with falling refining margins and the planned launch of a new round of tax probes on those private refiners, the so-called teapots. The independent refiners in China, mostly located in the eastern province of Shandong, account for around a fifth of all Chinese imports.

Year to date through August, refinery throughput was equivalent to around 13.06 million bpd, down by 6.3% compared to the first eight months of last year, per official Chinese data in tons crunched by Reuters.

Also Read: China’s Oil And Gas Production Hits Record in 2022 Half Year Report.

Earlier this week, reports emerged that China could soon issue a new batch of export quotas for its refiners, which could raise throughput and boost Chinese crude imports.
Refiners have applied for 15 million tons in new export quotas for fuels, including diesel and gasoline, Bloomberg reported on Thursday, citing sources with knowledge of the matter.

If Chinese authorities decide to grant the asked quota volumes, the Chinese quota so far this year would rise to the level of the whole of 2021 and would mark a U-turn in export quota policies of recent months,

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