China Raises Crude Import Quota for Private Refiners

China has raised by 6% the total import quota for private importers for next year, to about 5.14 million barrels per day (bpd), the commerce ministry of the world’s top crude oil importer said on Tuesday.

The combined import quota for non-state-owned companies was raised to 257 million metric tons, or 5.14 million bpd per Reuters calculations, from 243 million tons in quotas allocated to private refiners for this year.

Private refiners in China need to be granted crude import quotas to be able to import oil to process at their refineries.

The higher quota for 2025 comes as Shandong Yulong Petrochemical, the newest refinery in China, started last month operations at a 200,000-bpd crude processing unit. Shandong Yulong Petrochemical has another similar unit being prepared for start-up.

By the end of this year, China will allocate the first batch of the crude import quotas to the qualified applicants, the commerce ministry said in a statement carried by Reuters.

Firms that haven’t imported crude in the past two years will not be allocated any quotas, the ministry added.

At a later stage, China will adjust and add quotas for 2025, after receiving feedback from refiners about their demand and newly operational capacity, according to the Commerce Ministry.

Every year, China allocates crude import quotas to its private refiners. The volumes and the timing of the different batches, usually three to four per year, are being closely watched by analysts for clues about China’s crude import appetite and strategy in the near term.

China’s crude oil demand has disappointed so far this year, depressing oil prices and prompting OPEC and the IEA to revise down their expectations of global oil demand growth for 2024.

Weaker-than-expected oil consumption in China and rising electric vehicle sales will continue to weigh on the world’s oil demand growth going forward, according to the head of the International Energy Agency (IEA).