China loosens fuel export restrictions

The move came after the US and Iran last month signed an interim peace agreement. China is also one of Asia’s largest fuel exporters.

In March, the country asked oil refineries to stop signing new fuel export contracts and sought to negotiate the cancellation of committed shipments to ensure domestic supply.

Therefore, current developments are expected to cool down transportation fuel prices in the region. The world’s largest oil refiner is gradually returning to normal, after a period of disruption due to the Middle East war. They allowed private oil refinery Zhejiang Petrochemical to resume exports after more than 3 months of suspension.

This move could also encourage state-owned oil refineries to increase output to take advantage of high export margins, thereby supporting the recovery of oil delivered to China – the world’s largest oil importer. The export profit margin of this country’s oil refineries is considered attractive, fluctuating around 1,000 yuan ($147) a ton or more this week, according to two industry sources. Reuters.

Over the past few months, only state-owned enterprises have been allowed to export gasoline, diesel and jet fuel. However, they must submit documents to have their export volume approved each month.

Chinese oil refineries are planning to export about 3 million tons of fuel in July. This level is equivalent to last year’s average.

However, the above sources also said it is unclear whether the lifting of export restrictions will be maintained in August or not. The interim agreement between the US and Iran has caused oil exports from the Middle East to increase sharply, pulling world prices down and easing concerns about supply. However, new attacks this week are making the market uneasy and pulling prices back up.