China’s exports of refined fuel are to continue growing in the medium to long term, state-run Sinopec has forecast.
Exports will continue to grow because of slowing domestic demand and the start-up of new refining facilities, it said. Beijing-based Sinopec is the second largest oil and gas company in China and Asia’s top refiner.
The firm said in its latest annual oil and gas sector outlook that Chinese oil product shipments abroad would increase by 4% this year to reach 41 million tonnes, Reuters reported.
Chinese demand for domestic oil product will rise by around 3% this year, Sinopec predicted. Gasoline demand will increase by 7.3% this year, while diesel demand will drop by 1%, as the government promotes the use of natural gas over industrial fuel.
Stricter government tax rules will also lead smaller refiners to reduce imports of blending stocks in 2018, it said.
China’s crude oil imports from the US will exceed 10 million tonnes (200,000 bpd) in 2018, according to Sinopec. Last year the country imported 7.7 million tonnes (154,000 bpd) of crude from the US.
China, which is currently the second biggest oil consumer in the world after the US, has been strengthening its oil refining capacity for the last few decades to meet the needs of rapid demand growth.
As part of those efforts, it began issuing crude import licences to smaller, private refiners in an effort to promote competition in the country’s refining sector.
State-run PetroChina, Sinopec, China National Offshore Oil Corp. (CNOOC) and a few state trading companies had traditionally dominated the industry.
But those efforts to increase oil-refining capacity, along with sluggish demand growth, have led to some oversupply in the market.
In 2017, China’s teapots reportedly imported around about 70.5 million tonnes (1.41 million bpd) of crude, up from 42.1 million tonnes (842,000 bpd) the previous year.
Despite oversupply, the country is aiming to add at least 2.5 million bpd of refining capacity by 2020, Sinopec indicated in 2017.