China Seeks New Outlet for Oil Refiners’ Excess Capacity

China’s cabinet has decided to further pursue a policy to allow eligible private refineries to export refined oil products.

The decision, which came in the form of policy guidelines, highlights how the country is grappling with overcapacity in its oil refining market that has taken a toll on the industry’s bottom line. In the first half of 2019, the average profit from processing a ton of crude oil in China fell by 32% year-on-year to 129 yuan ($18.41), the lowest in five years, according to data from the China Petroleum and Chemical Industry Federation.