Chinese exporters are expected to cut shipments of key oil products in August due to limited export quota availability. Industry analysts expect China’s oil product exports to fall to a six-year low of 1.07 million bpd next month, about 7% lower than planned shipments in July and well below the monthly average of 4.38 million in January-June. One of the exporters said it would skip gasoil exports in August as Beijing has not allocated the second batch of quotas for this year. The company has already slashed its July exports to 30,000 tons from a monthly average of around 90,000 tons.
These companies held only about 3.21 million tons of oil product export quotas for July and beyond. However, they can ramp up exports in August if the government issues new quotas. Nevertheless, industry sources said Beijing would likely limit oil product exports to control emissions. The government is reportedly planning to issue 9.5 million tons of export quotas by the end of July.
According to the sources, Chinese exporters planned to increase gasoline shipments to 170,000 tons in August to grab hefty profits amid limited quotas. Moreover, refiners are likely to export more gasoline to reduce domestic inventories. Meanwhile, gasoil and jet fuel exports are expected to decline by 38.8% and 4.8% month-on-month to 300,000 tons and 600,000 tons, respectively.
