China’s Diesel Exports Rise to Three-Year High as Demand Weakens

China’s diesel exports rose to the highest level in almost three years in March and gasoline shipments climbed to a one-year high amid the nation’s weakest domestic oil demand in five months.

Overseas sales of diesel exceeded imports by 394,851 metric tons, figures e-mailed by the General Administration of Customs today show. That’s equivalent to 95,800 barrels a day, the most since July 2010, according to data compiled by Bloomberg. Net gasoline exports climbed to 506,110 tons, or about 138,000 barrels a day, the most since March 2012.

China, the world’s second-biggest oil consumer, has curbed demand for fuel and petrochemicals as its economy slows. Apparent oil consumption, or crude processed plus net refined-product imports, dropped to 9.77 million barrels a day last month, the lowest since October, government data show. The nation’s gross domestic product expanded 7.7 percent in the first quarter, compared with 7.9 percent in the three months ended December.

“Oil-product sales are quite sluggish, leading to high fuel stockpiles,” Liao Kaishun, an analyst with ICIS CI Energy, a Shanghai-based energy consultant, said by phone. “So refiners have to ramp up exports to draw down their inventory.”

China’s commercial stockpiles of diesel rose 18 percent to 11.2 million tons in February, the highest level in 10 months, a report from Xinhua News Agency’s China Oil, Gas & Petrochemicals newsletter showed March 22. Gasoline supplies dropped 7.8 percent to 6.8 million tons after climbing to the highest in at least two years in January.

Gas, Crude

Diesel exports last month rose more than six-fold from a year ago to 415,931 tons, while imports fell 62 percent to 21,080 tons, today’s data show. Gasoline exports fell 2.7 percent to 506,116 tons, while imports were at 6 tons.

China’s imports of natural gas through the Central Asia Pipeline, mostly from Turkmenistan, rose 22 percent to 1.48 million tons in March while liquefied natural gas imports gained 12 percent to 1.26 million tons.

Crude purchases from Iran increased 61 percent from a year earlier to 1.73 million tons, according to the data. Cargoes from the Middle Eastern nation were disrupted a year ago because of a payment dispute between the two nations. Deliveries last month slid 13 percent from February.

Iran is under Western sanctions on its energy sales because of its atomic program. The U.S. State Department on Dec. 7 extended exemptions for 180 days for China and eight other countries from measures related to the sanctions, saying they had “continued to significantly reduce” their purchases of the Islamic republic’s oil.

China exported 106,000 tons of crude to North Korea last month after no shipments in February, the customs data show. Shipments climbed 8.2 percent from a year earlier. China, which is North Korea’s closest political ally and biggest trading partner, will co-operate with the U.S. to persuade the country to abandon its nuclear pursuits, Yang Jiechi, China’s foreign policy chief, said in Beijing this month during a visit by U.S. Secretary of State John Kerry.