China’s imports of Iranian crude in May surged to the highest level in seven months after a recovery in refining margins.
The Asian nation imported 1.54 million barrels a day of Iranian oil last month, the most since October, according to data from Kpler. Over half went to buyers in Qingdao where many independent refiners are clustered.
China’s independent refiners — known as teapots — have struggled with weak margins for making fuels this year that’s led to companies cutting operational rates. The processors account for a quarter of the nation’s total refining capacity and are typically big producers of diesel.
The profit from converting crude into diesel and gasoline — or the crack spread — has recovered since early April and are near the highest seasonal level in 10 years, according to a note from Mysteel OilChem dated June 6.
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