Beijing permits teapot refiners to cut run rates as high inventories and losses outweigh supply concerns amid Middle East tensions.
China has eased a directive requiring independent refiners to maintain high fuel output despite financial losses. The move follows two months of mounting losses and elevated crude and fuel stockpiles, reducing urgency for supply preservation amid Middle East shipping disruptions.
Earlier, authorities threatened to slash crude import quotas for refiners reducing run rates, prioritizing domestic fuel supply over profitability. The policy shift reflects improved inventory levels and diminished risks from the Strait of Hormuz shipping constraints.
No immediate market reaction was reported, though the decision may signal reduced demand for crude imports in the near term.