An aerial view shows tugboats helping a crude oil tanker to berth at an oil terminal, off Waidiao Island in Zhoushan, Zhejiang province, China July 18, 2022
The decline was largely attributed to planned maintenance work at several state-owned and independent refineries, which limited their operating capacity. Domestic refinery utilization rates continued to decrease throughout the month, reaching the lowest point since the fourth quarter of 2022, according to Sublime China Information, a domestic consultancy.
The consultancy noted that the average operating rate of primary refining units fell to 72.87% in May. A total of 11 refineries were either fully shut down or undergoing partial maintenance during this period. As a result, monthly production of gasoline and diesel dropped by an estimated 1.421 million metric tons.
Despite the overall downturn, independent refiners in Shandong province—often referred to as “teapots”—experienced a slight improvement in profitability. Sublime China Information reported that the theoretical average margin for these refiners rose to 293 yuan ($40.80) per metric ton in May, an increase of 23 yuan compared to April. The consultancy explained that the cost of raw materials fell more significantly than product revenues, leading to a positive margin shift.
Looking ahead, market analytics firm Vortexa indicated that refinery throughput is expected to rebound in June, as several state-operated facilities are scheduled to complete their maintenance cycles in late May and early June.
In contrast to the decline in refinery throughput, China’s domestic crude oil production saw moderate growth. According to NBS data, May production reached 18.47 million metric tons, or around 4.35 million bpd, marking a 1.8% year-on-year increase. From January to May, cumulative crude output rose by 1.3% to 90.28 million metric tons, equivalent to about 4.36 million bpd.
Natural gas production also recorded a solid increase in May, with output rising 9.1% year-on-year to 22.1 billion cubic meters. For the first five months of 2024, natural gas production grew 6% compared to the same period last year.
These figures reflect both short-term operational fluctuations and long-term trends in China’s energy sector, highlighting efforts to maintain domestic energy supply while managing periodic refinery maintenance and optimizing production margins.
