China’s falling gasoil exports are benefiting refiners in other Asian countries, with the profit from producing the fuel hitting its 18-month high, analysts said. Gasoil is the building block to produce middle distillates such as diesel, jet fuel, and heating oil. China has been the second-largest gasoil exporter in Asia, but its shipments have plunged in recent months due to slower refining activity and a lack of export quotas.
Customs data showed China exported 540,000 tons (135,000 bpd) of diesel in August, the lowest since May 2015 and compared to 1.39 million tons in July. For the first eight months of the year, China’s total diesel exports were 3.5% below the same period in 2020. China’s diesel exports are expected to fall again slightly to 134,600 bpd in September.
The absence of Chinese diesel is supporting profits for refiners in other Asian countries. The profit margin, or crack, to convert Dubai crude into a barrel of gasoil in Singapore climbed to $7.96 on September 17, the highest in 18 months. The crack retreated to $7.92 on Monday but still well above the year-to-date low of $3.44 on August 24.
