China looks overseas for transport fuel supplies

Chinese state-controlled refiner CNOOC, a typical exporter of transport fuels, has turned to the international market to buy gasoline because of firm domestic prices.

The refiner bought a 210,000 bl 92R gasoline cargo that was discharged at Nantong port in east China's Jiangsu province in late June in a rare move. Other details of the shipment could not be confirmed. ExxonMobil could have chartered the Chang Hang Hong Tu to load finished gasoline from Singapore's Vopak Banyan oil tanks on 9 June. The cargo was likely discharged at CNOOC's Nantong port terminal on 22 June, according to oil analytics firm Vortexa.

The Argus 92R Shandong price premium against Argus 92R Singapore spot assessments remains above $8/bl this week, higher than the first-half 2021 average of around a $4.38/bl premium so far. But Chinese imports may be constrained by limited import quotas and as domestic prices start to soften. The Chinese domestic price premium against the Singapore price peaked on 21 May at $13.62/bl, but fell steadily to reach $8.89/bl yesterday.

CNOOC is joined by fellow state-owned refiner Sinochem, another major exporter of transport fuels, in importing cargoes into China. Sinochem imported in late May 118,300 bl of 92R gasoline and 283,500 bl of ultra-low-sulphur-diesel for delivery to Dongguan port in south China's Guangdong province. This is the first bulk gasoline import for delivery to Dongguan in recent years.

CNOOC usually sells about 2-3 medium-range gasoline cargoes each month through spot tenders but has offered just 12,000t of gasoline for loading from Dongfang in June and one 35,000t cargo of non-oxygenated gasoline for 17-18 May loading in the past two months, according to Argus' tender records.

China is a major supplier of transport fuels to the Asian region. It exported 423,000 b/d of gasoline and 405,000 b/d of gasoil in May compared with 414,000 b/d and 676,500 b/d respectively in April. But China's transport fuel imports were showing signs of rising during the month, with its purchase of 23,000 b/d of gasoline the highest since May 2020 and 23,500 b/d of gasoil the highest since February 2021.

By Aldric Chew