SUBSCRIBE
PROFILE

Decline in Chinese refinery utilization rates: global impact

Oil refinery utilization rates in China are down on the third-quarter record, due to lower margins and a shortage of export quotas, which could impact crude oil demand in the world's largest importer and influence global oil prices.

Share:

Raffineries et pétrole mondial en Chine

Subscribe for unlimited access to all energy sector news.

Over 150 multisector articles and analyses every week.

Your 1st year at 99 $*

then 199 $/year

SUBSCRIBE — 99 $ for the 1st year

Create a free account to read this article

*renews at 199$/year, cancel anytime before renewal.

Oil refinery utilization rates in China are down on the record third quarter, due to lower margins and a shortage of export quotas, industry traders and consultancies said. This drop in refinery output could reduce demand for crude oil from the world’s main importer and limit world oil prices, which could have consequences for crude oil reserves in China and prices for its main supplier, Russia.

 

Impact on global oil demand

According to consulting firm FGE, China is expected to process 15.1 million barrels per day (bpd) in November, compared with 15.37 million bpd in October. This decrease was mainly due to production cutbacks at independent refineries, known as “teapots”, and at state-owned refineries. Mia Geng, head of China oil analysis at FGE, said, “Refineries are likely to consider marginal production cuts due to limited export quotas for the rest of the year. In addition, we are already seeing inventory builds for transportation fuels due to falling demand.” State-owned refineries, which benefited from lucrative fuel exports earlier this year, see little incentive to increase production, as Beijing is unlikely to issue more fuel export permits this year.

 

Outlook for the fourth quarter

“Margins are almost disappearing as we process more expensive crude oil while demand for refined fuel is weakening,” said a Sinopec refinery official, adding that his plant was cutting production by around 20,000 bpd this month, to the lowest level of the year. “Weak industrial demand for petrochemicals isn’t helping either.” Consulting firm Energy Aspects reduced its forecast for Chinese refinery output in November and December by 100,000 bpd to an average of 15.65 million bpd in the fourth quarter. “Our fourth-quarter production forecasts are under greater downward pressure due to teapot production cuts and the shortage of crude oil imports,” said analyst Sun Jianan in an email response to Reuters.

 

declining oil refinery utilization rates in China are having a significant impact on global crude oil demand and market prices. This trend, caused by lower margins and a shortage of export quotas, could influence not only the Chinese economy but the entire global oil sector.

  • Popular on energynews.pro
ONEOK and partners launch Eiger Express project to link Permian to Gulf
BP Restarts Whiting Refinery After Flooding: Regional Market Pressures Emerge
Several South Korean groups back $50bn nuclear projects in the United States
Metacon confirms partial delivery and receives EUR 14.9 million
Solar will dominate more than half of the new power capacity planned in the United States in 2025
Trump’s administration imposes 50% tariffs on Indian exports starting Wednesday
The United States will apply 50% tariffs on Indian exports in response to New Delhi’s purchases of Russian oil, further straining trade relations between the two partners.
The global petrochemical filtration market will reach $6.76bn by 2030
Rising energy demand is driving investments in petrochemical filtration, a market growing at an average annual rate of 5.9% through 2030.
Chevron eyes Libya return after fifteen years away from the oil market
Chevron has opened talks with Libya’s National Oil Corporation on a possible return to exploration and production after leaving the country in 2010 due to unsuccessful drilling.
Canada launches consultation on offshore drilling monitoring
The Impact Assessment Agency of Canada opens public consultation on its 2024-2025 draft monitoring report for offshore oil and gas exploratory drilling off Newfoundland and Labrador.
Cenovus acquires MEG Energy for $7.9 billion in strategic deal
Cenovus Energy announces the acquisition of MEG Energy through a mixed transaction aimed at strengthening its position in oil sands while optimizing cost structure and integrated production.
Vantage Drilling extends conditional agreement for the Platinum Explorer rig
Vantage Drilling International Ltd. extends the validity of its conditional letter of award until August 29, without changes to the initial terms.
Libya’s NOC Plans Bilateral Forum with American Energy Stakeholders
Libya is preparing to host an energy forum in partnership with American companies to boost investment in its oil and gas sectors.
The United States Sanctions Greek Shipper for Iranian Oil Trafficking
Washington increases pressure on Iran’s oil sector by sanctioning a Greek shipper and its affiliates, accused of facilitating crude exports to Asia despite existing embargoes.
BOEM validates final review for 30 offshore sales in the Gulf of America
The Bureau of Ocean Energy Management formalizes a strategic environmental review, setting the framework for 30 oil sales in the Gulf of America by 2040, in line with a new federal law and current executive directives.
Hungary Seeks U.S. Support After New Disruptions on the Druzhba Pipeline
Amid repeated disruptions on the Druzhba pipeline, attributed to Ukrainian strikes, Hungary has requested U.S. support to secure its oil supply.
Aker BP quadruples estimates for Omega Alfa field in the North Sea
Norwegian producer Aker BP raises its oil potential forecast for the Omega Alfa well, part of the Yggdrasil project, with estimated resources reaching up to 134 million barrels of oil equivalent.
Moretti expected to chair Petrobras board with ministerial backing
Bruno Moretti, current special secretary to the presidency, is in pole position to lead Petrobras’ board of directors after Pietro Mendes’ resignation for a regulatory role.
Next Bridge Raises $6 Million to Fund Panther Project in Louisiana
Next Bridge Hydrocarbons completes a $6 million private debt raise to support its involvement in the Panther project while restructuring part of its existing debt.
Sinopec Shanghai Posts Half-Year Loss Amid Declining Petrochemical Demand
Sinopec Shanghai Petrochemical reported a net loss in the first half of 2025, impacted by reduced demand for fuels and chemical products, as well as declining sales volumes.
Togolese ZIH Acquires Petrogal GB with Structured Financing from Ecobank
Zener International Holding takes over Petrogal’s assets in Guinea-Bissau, backed by a $24 million structured financing deal arranged with support from Ecobank and the West African Development Bank.
Pietro Mendes resigns from Petrobras to lead Brazilian oil agency ANP
Petrobras board chairman Pietro Mendes resigned after his appointment to lead the National Petroleum Agency, confirmed by the Senate.
Bahrain signs strategic energy agreement with EOG Resources
Bahrain has signed an energy concession agreement with EOG Resources and Bapco Energies, reinforcing its national strategy and opening the way to new opportunities in oil and gas exploration.
Talos identifies new hydrocarbon reserve in the Gulf of Mexico
Talos Energy confirmed the presence of oil in the Daenerys area, located in the Gulf of Mexico, after a successful sub-salt drilling operation completed ahead of schedule.
Ithaca Energy doubles production in H1 2025 and raises its forecasts
Thanks to strong operational performance, Ithaca Energy recorded record production in the first half of 2025, supporting improved annual guidance and significant dividend distributions.
Oil prices rise after unexpected decline in US crude stocks
A surprise drop in US crude inventories and renewed focus on peace talks in Ukraine are shaping oil market dynamics.

Log in to read this article

You'll also have access to a selection of our best content.

or

Go unlimited with our annual offer: $99 for the 1styear year, then $ 199/year.

SUBSCRIBE - €99