China grants extra crude import quota

China has granted independent refiners an extra crude oil import quota of 5.84 million metric tons for cargoes arriving by the end of 2024 and early 2025, according to people familiar with the situation on Monday.

This move is expected to boost China’s crude imports next year following a rebound in November due to price cuts from Iraq and Saudi Arabia.

The new quotas were allocated to refiners including Hengli Petrochemical and independent refineries in eastern Shandong province, also known as “teapots.” The breakdown includes an estimated 3.84 million tons (76,800 bpd) for Shandong teapots and 2 million tons for Hengli.

The additional quotas are expected to be used by the end of the year. It is unclear whether these volumes count towards 2024 or 2025 import allocations.

This decision comes after some independent refiners expressed concerns about insufficient quotas limiting their ability to import crude oil.

The recent rise in gasoline and diesel production has improved their profit margins, prompting a ramp-up in operations.

China’s overall crude oil import quota for non-state-owned firms is set at 243 million tons for 2024, with an increase to 257 million tons planned for 2025.

“The additional quotas will stir up some interest in prompt cargoes, particularly Iranian oil, which remains in the trading cycle for December arrivals,” said Xu Muyu, a senior analyst at Kpler.

Attribution: Reuters

Subediting: M. S. Salama