China’s diesel exports nearly doubled in October from a year earlier, although they were lower than in September, Chinese customs data showed on Friday.
Last month, a month after China issued a fresh batch of export quotas to its refiners, shipments of diesel stood at 1.06 million tons, almost double from October 2021, but lower than the September 2022 exports that hit a 15-month high
Some September cargoes of Chinese oil products may have been actually shipped in October, which could explain the lower October export data on diesel and other fuels, Emma Li, an analyst at Vortexa, told Bloomberg.
In November, total Chinese oil product exports could be as high as 6 million tons, which would be 37% higher than in October, OilChem told Bloomberg.
Most Chinese exports are expected to remain within the Asian region. So it’s unlikely that China’s higher fuel exports will directly impact the European and U.S. diesel supply, but other refiners in Asia could boost exports to Europe in the coming months as the EU would be looking to replace its diesel imports from Russia ahead of the embargo beginning on February 5.
In September, the highest Chinese exports of fuels in 15 months came just as Beijing issued its biggest fuel export quotas to its refiners for this year at the end of September. Chinese authorities have allocated 15 million tons of new fuel export quotas to its major refiners, and the quota could be rolled over into early next year.
China’s diesel exports more than doubled in September from the same month last year, to stand at 1.73 million tons, and were also significantly higher than the August exports, according to data from the Chinese General Administration of Customs. The volume of diesel exports in September was the highest monthly figure since July 2021, per Reuters estimates. To compare, China exported 830,000 tons of diesel in August 2022 and 780,000 tons in September 2021.
By Michael Kern for Oilprice.com
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That is why China’s diesel exports have nearly doubled in October from year earlier to reach 32.67 million barrels (mb) and they are expected to hit 44.76 mb in November or 37% higher than October. This means that China's crude oil imports must be rising proportionately.
How did the author reach the conclusion that most Chinese exports are expected to remain within the Asian region when both the US and EU markets are facing serious shortages of diesel?
My well-informed guess is that the bulk of Chinese and also Indian exports of petroleum products are heading towards the United States and the EU.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert