CHINA - Government export quotas have forbidden indepen- dent teapot refineries from exporting oil products, including jet fuel, at the start of 2017. Those smaller plants were excluded from product export quotas issued by the Ministry of Commerce. A notice from the ministry said state-run quartet PetroChina, Sinopec, CNOOC and Sinochem would be allowed to export 12.4 million tons of gasoline, gasoil and jet fuel so far this year, down from the 20.5 million tons granted in the first round for 2016. However, the ministry typically issues three or four rounds of quotas per year, so more export allocations are likely to appear later in the year. While teapots have been excluded so far, the effect is unlikely to be significant as those plants typically do not export large volumes of refined products. Industry insiders believe the snub is a punishment for alleged tax evasion or other wrong-doings but say it will not significantly affect the run rates of teapot refiners as their all- important quotas to process imported crude oil look set to remain intact. If teapots continue to run hard this year, their production of middle distillates is likely to maintain the pressure on the Chinese majors to export more gasoil, and to a lesser extent, jet fuel.
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