Chinese oil companies are gearing up for a significant increase in clean oil product exports in July, with gasoil shipments expected to rise by 88% month-over-month. Industry sources indicate that exports could reach around 640,000 metric tons, up from approximately 340,000 metric tons planned for June. This boost in exports comes as refining margins begin to show signs of recovery, largely attributed to stronger oil prices following the recent Iran-Israel conflict. The theoretical export margins for gasoil hit $2.5 per barrel around June 20 but experienced a downturn shortly after, dipping to about minus $5 per barrel by June 26 due to falling crude prices.
Nonetheless, the anticipated increase aligns with typical market behavior, as refineries typically ramp up production following maintenance closures in July. Demand for gasoil in China has also stabilized post-harvest season, further necessitating additional exports. Total clean oil product exports for July are projected to reach 3.88 million metric tons, marking an 8.7% increase from the planned June volumes. While gasoil exports are set for a substantial rise, gasoline export outflows are expected to see only a modest uptick, with targets at approximately 760,000 metric tons compared to 650,000 metric tons in June.
Jet fuel exports are anticipated to decrease slightly, projected at 2.48 million metric tons, down from 2.58 million metric tons planned for the previous month. In terms of export destinations, Mexico emerged as a significant recipient in May, receiving 105,300 metric tons of gasoline, a 48.3% increase from April. This surge followed a hiatus in trade between October 2024 and March 2025, with Mexico becoming the second-largest destination for Chinese gasoline after Singapore. Meanwhile, the Philippines accounted for 64% of China’s gasoil exports in May, importing 322,000 metric tons, reinforcing its status as the top buyer.