China’s crude oil imports surged to an all-time high of 10.43 million barrels per day in November, as they beat the previous record for highest crude imports set in October, according to Chinese customs data, according to a report by Reuters.
Chinese crude oil imports last month were up by 8.5 percent compared to November 2017 and was driven by smaller independent refiners who were rushing to fulfill their 2018 oil import quotas before they expire.
In November, independent refiners, the so-called teapots continued to buy high volumes and some of them increased intake as they start trial runs at newly-built oil refineries. Hengli, an independent private refinery is planning trials at its new 400,000 barrels per day refinery at Dalian, a port city in northeastern China, while Zhejiang Petrochemical is also expected to begin trial runs at some units of its refinery with 400,000 barrels per day capacity at Zhoushan. According to Reuters, Zhejiang Petrochemical has imported several cargoes of crude oil from Oman this quarter.
Two months ago, China raised by 42 percent the oil import quota for its non-state refiners, most of which are the independent refiners, for 2019 as new refinery capacity is planned to enter into operation next year. China is allocating a total of up to 202 million tons, or 4.06 million barrels per day, of import quota to non-state refineries for next year, according to Platts. Independent refiners had until November 10 to apply, and those who haven’t imported crude oil in 2018 will not be allocated quotas for next year.
Chinese customs data also showed that crude oil imports between January and November averaged 9.17 million barrels per day, higher than the level of imports in the same period last year, and putting China on course to set a new record for crude oil imports in 2018.
Who’s afraid of the T+1 settlement cycle of CSCS?