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China has released new oil export quotas for the rest of 2024, comprising 8 million metric tons of clean refined fuel and 1 million tons of marine fuel, two Chinese commodities consultancies and several trade sources said.
The latest and likely the final batch for 2024 brings the total export allowance so far this year to 54 million tons, including 45 million tons released under the first two allotments, steady from last year's total amount at 53.99 million tons.
However, the new allowance volumes for this third batch were lower compared with last year's third batch of 15 million tons, comprised of 12 million tons for light transportation fuels and 3 million tons for marine bunker.
China's product export quotas are watched by the industry as they impact supply and refiners' margins in the region.
The new batch of export quota could stimulate the country's crude runs, as the Chinese refiners still have a sizeable amount of unutilised export quota going into Q4, compared with last year, before this latest release, said Wood Mackenzie's managing consultant Bi Xin Xin.
However, there is still downside risk stemming from the recovery of domestic demand and overall profitability in the domestic and export markets - which has been volatile, she added.
For refined fuels such as gasoline, diesel and jet fuel, state-owned oil majors such as Sinopec, CNPC and CNOOC were given 6.38 million tons of export allowances, or around 80 per cent of the total volumes, according to one of the consultancies JLC.
The rest were awarded to Sinochem at 790,000 tons, private refiner Rongsheng Petrochemical Corp at 730,000 tons and China North Industries Group Corp (Norinco) at 100,000 tons.
China's Ministry of Commerce did not respond to Reuters' request for comment.
China's exports for gasoline and diesel in the first eight months this year have fallen by 26 per cent and 31 per cent respectively versus year-ago levels, due to lower refinery output and softening export margins.
Only aviation fuel bucked the trend with exports up 33 per cent supported by a rebound in travel demand and stronger jet fuel margins in Asia.
Meanwhile, the marine fuel export quota for the third batch was below market's expectations of 2 million to 3 million tons.
This could mean less domestic supply available for bunkering in China, which may lead to more barrels from Singapore, a trader said.
However, the lower volume was unlikely to have a huge impact on market prices as China's bunker sales volume dropped so far in 2024 compared with 2023. -Reuters