China increases the export of fine fuel when the margin rises
China’s main processed fuel exports are on the right track to jump to the highest in 16 months because the refiners take advantage of the increase in profit margins.
Delivery in July from middle and light distillation, which includes diesel and gasoline, is estimated to reach 26.63 million barrels, or 859,000 barrels per day, data compiled by commodity analysts show KPler.
This figure is up from 796,000 BPD in June and the highest since 1.06 million BPD in March 2024, data shows.
Chinese refiners have a substantial reserve capacity to increase output while the export quota that is not used will allow them to take advantage of the increase in profit margins for processed fuel, especially Gasoil, building blocks for diesel and kerosene jets.
Crack spread, or profit margin, to produce 10 ppm of Gasoil in Singapore (Go10SGCKMC1) ends at $ 20.43 per barrel on Monday, up from the previous closure of $ 21.00.
Margin dropped from the highest 16 months $ 22.85 per barrel from July 18, but 56% higher than the lowest so far this year $ 13.05 on March 25.
Gasoil China’s exports were estimated at 6.22 million barrels in July by the KPler, the highest since June 2024 and rose from only 3.56 million months ago.
Data from LSEG oil research is slightly more bullish, with Gasoil exports pegged at 6.55 million barrels for July, more than double 3.13 million recorded for June.
Chinese exports of other medium distillation, such as jet kerosene, also rose in July, with the KPler estimating the shipment of 9.59 million barrels, up from 8.65 million in June and the most since January.
More to come?
There is also a room for China to increase shipping in the coming months, because Penytiling still has an export quota that is not used.
The total export quota given by Beijing to Penyking amounted to 45 million metric tons and official customs data showed the total exports of processed products of 27.19 million in the first half of 2025, a decrease of 9.7% from the appropriate period in 2024.
Chinese refiners have increased output, with throughput an increase of 8.5% in June to 15.15 million BPD, official data was shown on July 15.
It is the highest daily processing level since September 2023 and the possibility of refiners trying to take advantage of price increases for fine fuel while processing crude oil secured when the price of trend oil is lower at the beginning of the second quarter.
China also sent more gasoline, with LSEG estimating July exports of 6.7 million barrels, up from 5.7 million in June and most since March.
Profit margin for gasoline in Singapore (GL92-Sin-CRK) is not as strong as diesel, ending at $ 7.43 per barrel on Monday, up from $ 7.41 at the previous close.
Margin dropped from the highest this year so far, amounting to $ 11.83 per barrel on May 9, but still doubled $ 3.68 hit on January 21.
The current price for processed fuel is enough to encourage further Chinese exports in the coming months.
This case can be further supported if the new European Union sanctions targeting Russian fuel exports have indeed resulted in shifting flow throughout the world.
The EU banned imports of processed products made from Russian crude oil, which will mostly have an impact on studying in India, who have bought Russian oil discounts and exported fuel to Europe and Asia.
While Chinese refiners also buy Russian crude oil, it will be easier for them to show which individual plants do not use Russian oil, and therefore can still export to Europe.
At present there are almost no processed Chinese products that end in Europe, but it is possible if Indian refiners are forced to look for new markets outside Europe, and European buyers are forced to find new suppliers.
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Source: Reuters
