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Rising oil prices may force China’s independent refiners to cut runs

Energy Aspects says many smaller private refiners have thinner margins, and those margins have already fallen to breakeven from about $10 per barrel in early July.

Reported · Written up by our desk · Energy

Chinese independent refiners are at risk of cutting processing rates as international oil prices rise and supply from major exporters such as Venezuela and Iran tightens, according to OilPrice citing an Energy Aspects analyst.

The outlet says the so-called teapots, or privately run refiners, are more sensitive to oil market shifts because their refining margins are slimmer than those of state-owned majors.

OilPrice adds that those margins have already fallen to breakeven, down from around $10 per barrel in early July, and that China’s crude imports in August rose to 37.93 million tons, or 8.93 million barrels per day, up 6.2% from July.

Still, August imports were 23.4% lower than a year earlier, following a June cut to a decade low that contributed to weaker refinery output and a fuel squeeze that the outlet says could deepen as Middle East fighting intensifies and pushes oil prices higher.

Latest closeWTI crude $94.28 ▲3.1%

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