China has issued new oil product export quotas to enable oil companies to send their surplus barrels overseas, senior officials with two quota holders said on Aug. 28.
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"The new allocation is out with Sinopec's volume topping among the quota holders, and we are arranging September exports. It looks [like there would be] no restriction on outflows for the rest of the year," an official with a state-owned company said.
Sinopec Shanghai Petrochemical executives said last week the company plans to increase oil product exports if the margin remains strong in the second half of the year, while maintaining its priority of meeting domestic demand.
An official with another state-owned company also said Beijing has issued new oil product export quotas, but both of them declined to give details on the quota volume.
Market sources said oil companies are set to export about 3.5 million mt of clean oil products in September, comprising about 800,000 mt of gasoline, 1.1 million mt of gasoil and 1.6 million mt of jet fuel. The volume is likely to be 10% higher than in August.
"It makes sense if the government relaxes the restriction on oil product exports to support industrial activities, thus boosting the weaker-than-expected economy. This would also help to sustain crude imports," a Hong Kong-based analyst said.
Beijing controls China's clean oil product exports by quota allocation and prioritizes meeting domestic needs.
Sources had said earlier this month that new quotas would be issued by the end of August, with the volume likely to be around 10 million mt.
The country exported 23.99 million mt, or 897,000 b/d, of gasoline, jet fuel and gasoil in the first seven months of the year, up 76.1% from a low base in the same period of 2022, according to data from the General Administration of Customs.
Without the new allocation, only about 4 million mt of clean oil product export quotas were available for August through the rest of the year given that the government awarded 27.99 million mt of quotas by end-July.