China imported 13.6% more crude oil in 2016 than the previous year, even though domestic demand for gasoline and diesel appeared sluggish, and record volumes of refined products were re-exported. Adjustments to import and export quotas for China’s refiners, particularly smaller “teapot” refiners, explain most of the surge in refined product exports. However, this pattern is set to change in 2017 given the reported elimination of refined product export quotas for teapots and slowing domestic demand, which may reduce crude imports.
