In this list
Energy Transition | Oil

China may delay 2022 oil product export quota allocation, affecting Jan outflow

Energy | Oil | Refined Products | Jet Fuel

Jet Fuel

Commodities | Crude Oil | Energy Transition | Shipping | Energy

Grangemouth’s closure: insights into the changing global refining landscape

Oil | Energy Transition | Energy

APPEC 2024

LNG | Natural Gas | Energy Transition | Renewables

EU Council, Parliament agree new gas regulation, Russian import measures

Energy | Oil | Refined Products | Gasoline

Japan Oil Products - Waterborne and Rack Price Assessments

Crude Oil | Electric Power | Electric Power Electricity | Energy Transition | Carbon | Emissions | Renewables | LNG | Natural Gas | Natural Gas Shale Gas | Refined Products | Fuel Oil | Shipping | Bunker Fuel | Marine Fuel | Oil & Gas

Insight Conversation: Ezran Mahadzir, Petronas LNG

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

China may delay 2022 oil product export quota allocation, affecting Jan outflow


Cap for 2022 exports yet to be set

Refineries unlikely to load export cargoes in early Jan

2022 quotas may drop by 10 mil mt: market sources

  • Author
  • Analyst Oceana Zhou    Staff
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Energy Transition Oil

China is unlikely to allocate the first batch of key oil product export quota for 2022 by end-December, which may prevent oil companies from sending out cargoes in early January, several Beijing-based sources with knowledge of the matter told S&P Global Platts in the week to Dec. 24.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The key oil products refer to gasoline, gasoil and jet fuel.

"We are waiting for the annual export volume guidance from the National Development and Reform Commission [NDRC]. It will take some time until the first batch of quota allocation," a Beijing-based source said.

Beijing controls China's domestically produced oil product exports by quotas.

Typically, the country's top economic planner NDRC sets the annual quota limits for a calendar year, while the Ministry of Commerce allocates the quota by batches within the cap by considering export licenses holders' applications.

In previous years, the first batch quotas for the subsequent year were issued by end-December to allow oil companies to execute their exports on time in January. China's export quotas for the previous years are not allowed to roll over to a new year.

"The process from NDRC setting the annual limit to actual allocation takes more than a week, so that it is more unlikely to see the batch by year-end," the Beijing-based source said.

Impact on loading

As a result, exporting refineries either have not finalized their January export plans or arranged their loading schedules in later next month instead of the early days, refining sources told Platts.

"Waiting for the allocation... we may need to postpone our loading schedule," a source with one of PetroChina's key exporting refinery in northeast China said.

"Our loading schedules are not in early January, hopefully, the impact is limited. But it is quite certain that export volume will fall in 2022," a source with PetroChina refinery in southern China said.

"We may not export until H2 of January, and it is difficult to plan without the allocation," said a source with one of Sinopec's flagship refinery.

Another Sinopec refining source based in eastern China said the plant will send two MR-sized cargoes to overseas in January, gasoline and gasoil each. The volume will fall from around 100,000 mt/month that the refinery usually exports.

2022 volume set to fall

The possible delay may be due to difficulty in setting the reduction of oil product exports from 2021, market sources said.

"It is difficult, as the quota for 2021 has slumped. To refineries, more quotas mean more flexibilities, but the government intends to cut further to limit emission and as a measure to tighten up the industry by producing just for meeting domestic needs," a Singapore-based analyst said.

Market sources estimated the 2022 exports quota cut could be as deep as around 10 million mt from the 2021 level.

The government slashed the quotas for exporting gasoline, gasoil and jet fuel in 2021 to 37 million mt from 59.03 million mt for 2020. However, the volume edged up to 37.61 million mt in November as Beijing allowed quota transferring from fuel oil.

China had been expected to increase oil product exports in line with growing refining capacity and slowdown in domestic demand, which would intensify competition in regional market.

However, a U-turn emerged in 2021 as Beijing firmly decided to reduce the country's exports to cut emissions in an effort to meet its net-zero target.