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Wednesday, July 6, 2022

Oil, Diesel Exports Halted By China’s State-Owned Refiners

WorldOil, Diesel Exports Halted By China's State-Owned Refiners

Asia (Times Of Ocean)- China has asked state refiners to consider stopping diesel and gasoline exports next month because of concerns about oil supply after Russia invaded Ukraine, Reuters reported on Wednesday, citing sources familiar with the situation.

“This is to prevent a shortage as independent refiners are under big pressure to lower throughput in the face of soaring crude oil prices,” a source with knowledge of the talks with state refiners told Reuters.

It is likely that China, the world’s largest crude oil importer, will continue to trade with Russia regardless of any sanctions that Western allies decide to impose in the future.

China is also concerned about its energy security, given the skyrocketing prices of energy commodities, of which it is a major importer.

As commodities prices skyrocket, China plans to boost its crude oil, natural gas, and coal production, increase its reserves of energy commodities, and keep stable imports to ensure its energy security, the top Chinese economic planner said earlier this week.

“Since the beginning of this year, under the combined influence of multiple factors such as the Covid-19 pandemic, the monetary policy shift of major economies, and especially the escalation of geopolitical conflicts, the international commodity price situation has become more severe, complex and uncertain,” Lian Weiliang, a vice-director at the National Development and Reform Commission (NDRC), said at a press briefing as carried by South China Morning Post.

A rising price pressure on energy and agricultural commodities “poses a new challenge to ensure domestic supply and price stability,” Lian said.

NDRC announced over the weekend that the country would increase coal production and reserves, develop major petroleum reserve projects, and increase petroleum reserves as well.

Last month, despite the climate goals of the world’s largest polluter, China said it would keep its coal-fired power plants running at full capacity in an attempt to assure energy security.

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