Ship-borne exports of refine products such as crude oil, will increase from the 589,000 barrels a day seen in 2014 according to maritime publication, Lloyd’s List.
These changes could potentially benefit the superyacht industry. Fuel bunkering companies could reap the benefit of cheaper diesel prices due to increased supply.
China’s government has recently reformed the rules governing the import and export of crude oil and petroleum products. Refiners can export less gasoline and jet fuel but can almost double the volume of diesel, meaning that the ship-borne export of refined products will increase from the current allowance of 589,000 barrels per day.
According to data published by the Organisation of Petroleum Exporting Countries in its Annual Statistical Bulletin 2015, this will place China sixth in the world rankings. The cause of the big increase in allowance for diesel exports is due to China’s refiners producing more products than can be absorbed in the typical domestic market.
Currently, China uses 11 million barrels per day(bpd) of petroleum products, but its refineries have a crude throughput capacity of more than 14 million bpd, meaning that even when operating at a reduced capacity, the country is still producing more diesel than is needed.
The biggest change the regulations will support is to allow smaller refiners to import crude oil. In the past, these small refiners have formed a large share of about 20% of China’s total refining capacity.
With demand for oil products growing by less than 3% in 2015, an increasing share of the growth in demand for crude oil will come from purchases for China’s strategic petroleum reserve. The government’s plans call for the creation by 2020 of a 500-million barrel reserve. According to the US Department of Energy the reserve currently holds between 141-180 million barrels.
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