Beijing, China. China has lifted refined fuel export restrictions for the rest of July and allowed a private refiner to resume shipments after a four-month halt, trade sources said on Wednesday. The move signals a return toward normal export activity after disruptions linked to the Iran war.
Export restrictions eased
The resumption of refined fuel exports from one of Asia’s largest exporters follows the interim peace deal between the United States and Iran. It is expected to ease transportation fuel prices in the region, where consumers have faced inflation since Beijing curbed shipments in March to secure domestic supplies.
Private refiner resumes shipments
Zhejiang Petrochemical Co, majority owned by Rongsheng Petrochemical 002493.SZ, has been permitted to export fuel in July, four sources briefed on the matter said. The company had halted exports for more than three months.
China’s Ministry of Commerce and the National Development Reform Commission did not immediately respond to faxed requests for comment. Rongsheng did not immediately respond to a request for comment. The sources declined to be named because they were not authorised to speak to the media.
State refiners and export volumes
Over the past few months, only state-owned companies were permitted to export gasoline, diesel and jet fuel, and they were required to apply for volumes on a monthly basis.
Refiners are planning to export roughly 3 million metric tons of the three fuels this month, including bonded volumes to Hong Kong and Macau, according to two other sources. That would be similar to last year’s average export volume.
However, the scheduling of these cargoes was still underway and should be settled by the end of this week, the sources said. Reuters had earlier reported that exports were initially set to reach nearly 2 million tons for July.
Market impact and uncertainty
The easing of export curbs may encourage state refiners to increase output to benefit from strong export margins, supporting a rebound in oil shipments to China, the world’s top importer.
It remains unclear whether the lifting of export curbs will continue in August, two of the sources said.
The interim U.S.-Iran deal had already prompted a surge in Middle Eastern oil exports, depressing global prices and easing supply concerns. However, this week’s attacks have again unsettled markets and pushed prices higher.
