China has issued its second batch of refined fuel export quotas for 2024, totaling 18 million metric tons, according to Chinese consultancies and trade sources. This volume is 2 million tons more than the second batch issued last year, and could boost fuel supplies and further depress refining margins in Asia.
The export volumes, comprising 14 million tons of refined products and 4 million tons of marine fuel, were primarily allotted to state-owned refiners. The new quota brings this year’s total for exports of refined and marine fuels to 45 million tons, following the first 27-million-ton batch issued at the start of January.
Emma Li, an analyst at shiptracking firm Vortexa, said the increased volume year-on-year is likely due to higher demand for jet fuel from the aviation bunkering sector, which is also counted as exports. China could also issue smaller batches for the rest of the year to avoid a large year-on-year rise.
State oil companies Sinopec and PetroChina, the top recipients of the quotas that cover diesel, gasoline, and aviation fuel, together were granted 9.98 million tons or more than 70% of the total, according to the two consultancies. Private refiner Zhejiang Petrochemical Corp was allotted 1.22 million tons, while a refinery subsidiary of state defense conglomerate Norinco and China National Aviation Fuel Company were assigned 230,000 tons in total.
The increased export volumes could boost fuel supplies in Asia and further depress refining margins in the region. China manages its refined oil exports via a strict quota system, using exports as a tool to balance and ensure the domestic market is sufficiently supplied.