China Likely to Boost Oil Products Exports Into Early 2023

After receiving the largest allocation from Beijing this year, Chinese refiners are likely to increase exports of refined oil products in the final two months of 2022 and into the first half of 2023, according to trade sources and analysts.

The rise in Chinese exports is likely stabilize the world's oil markets and partially replace Russian supplies that will be affected by European Union embargoes in the upcoming months.

It also enables the second-largest refiner in the world, which narrowly avoided a second-quarter contraction and a drop in the value of the yuan to a 14-year low, to tap into excess refining capacity and increase exports.

According to Sugandha Sachdeva, vice president of commodity and currency research at Religare Broking, "A ramp-up in product exports from China will support energy-starved oil markets considerably as there are concerns about an impending EU embargo on Russian supplies."

Sachdeva adds, strengthening exports in the face of declining consumer demand will also help the struggling Chinese economy.