China calls for independent refiners to maintain fuel output amid war disruption
China's state planner has told independent refiners not to cut run rates below their average levels of the past two years, several sources familiar with the matter said on Thursday, in a bid to safeguard domestic fuel supply.
The move comes as smaller refiners had been expected to cut crude processing rates in April following a sharp rally in oil prices due to the U.S.-Israeli war with Iran, and persistently weak domestic fuel demand.
The National Development and Reform Commission delivered the message at a meeting with independent refiners this week, the sources said. The NDRC did not immediately respond to a faxed request for comment.
Failure to comply could result in reduced crude import quotas, the sources added.
China regulates oil imports by its independent refiners, often known as teapots, under a quota system.
Refineries in the teapot hub of Shandong province operated at an average capacity of 53.66% in 2024 and 48.09% last year, according to Oilchem. China's teapots operated at about 55% capacity in February and March, according to Energy Aspects.
Research firm Horizon Insights had expected teapots to cut their operating rates by about 10% in April but it now expects run rates to remain roughly flat from March, refined products analyst Zhang Yuxin said.
Independent refiners account for roughly a quarter of China's refining capacity.
To pre-empt a potential fuel shortage amid the war in the Middle East, China last month halted refined fuel exports, with the curbs extending into April.
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