- China lowered the fuel export quota by 40% for its refiners compared to the same time last year, Bloomberg reports.
- China has issued 22.5 million tons of fuel exports for 2022, down from around 37 million tons in 2021 for the same period.
- The move suggests Beijing isn't interested in ramping up fuel exports even amid a global energy crunch.
China lowered the fuel export quota by 40% for its refiners compared to the same time last year, Bloomberg reported Wednesday.
The government controls the amount of fuel that state refiners and private companies can export, and it has moved to cap those exports to consolidate the sector, per the report.
In total, China has issued 22.5 million tons of fuel exports for 2022, whereas that figure hovered near 37 million tons a year ago. The move signals that Beijing isn't keen on ramping up fuel production despite a global energy crunch.
Huge swaths of China's economy and business operations have been shuttered due to ongoing COVID-19 lockdowns, which have only recently eased, and the country isn't using much of its refining capacity. In contrast, US refiners are running at near-maximum capacity, which are dwindling to historic lows.
Meanwhile, oil prices fell below $100 Tuesday, and Citibank forecasted that crude could plunge as low as $65 if global demand slows down amid recession fears.
Some analysts warn that the sell-off went too far, and that prices can bounce back and remain hot if Russian production falls off. Deutsche Bank analysts increased their forecasts because they anticipate supplies from Moscow to slip as the year goes on.
"With prospects of stricter sanctions on Russian oil exports the global crude oil supply-demand balance is expected to tighten over the next few quarters," the bank's analysts wrote in a note.