China's Fuel Production Cuts Could Undermine Global Oil Demand
China's pushing its oil refiners to reduce fuel output, raising new questions about demand in the largest importing nation just as the world's drillers need buyers for the extra barrels they're adding to the market.
The country's top economic planner wants the industry to cut production of refined petroleum products and increase output of chemicals, according to its annual work report at the National People's Congress on Wednesday. The order isn't necessarily surprising — top refiner Sinopec Group said earlier in the week that consumption of both diesel and gasoline has peaked, leaving petrochemicals as the major growth driver for demand.
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Newsweek
23-04-2025
- Newsweek
China Tries to Turn Key US Ally Against Trump
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. China has urged Japan, a treaty ally of the United States, to join forces to fight U.S. President Donald Trump's tariffs, the Japanese Kyodo News reports, citing officials in Tokyo. Japan and China have been in "regular communication" at different levels, the Consulate-General of Japan in Hong Kong told Newsweek. Newsweek has contacted the Chinese Foreign Ministry and the White House for comment by email. U.S. President Donald Trump announcing new tariffs in the Rose Garden at the White House in Washington, D.C., on April 2. U.S. President Donald Trump announcing new tariffs in the Rose Garden at the White House in Washington, D.C., on April 2. Mark Schiefelbein/AP Photo Why It Matters Earlier this month, Trump imposed "reciprocal tariffs" on dozens of countries, including China and Japan, in addition to a baseline 10 percent tariff on all imports. While he later ordered a pause on the reciprocal tariffs, China continued to face tariffs of up to 245 percent. Last week, Japanese officials visited Washington, D.C., to negotiate bilateral trade and security ties. After the meeting, Trump said "big progress" had been made, while Japanese Prime Minister Shigeru Ishiba warned that negotiations would "not be easy going forward." Meanwhile, China has retaliated against the U.S. with a 125 percent tariff and other punitive measures, including export controls on rare earth. On Tuesday, Trump softened his stance, saying tariffs on Chinese goods would "come down substantially, but it won't be zero." Chinese Premier Li Qiang at the opening session of the National People's Congress at the Great Hall of the People in Beijing on March 5. Chinese Premier Li Qiang at the opening session of the National People's Congress at the Great Hall of the People in Beijing on March 5. Ng Han Guan/AP Photo What To Know On Tuesday, Kyodo News reported that Chinese Premier Li Qiang had sent a letter to Ishiba through Beijing's ambassador in Tokyo. The Chinese leader appealed to his counterpart to fight protectionism together following Trump's introduction of tariffs on China and Japan. "Japan will consider its relationship with China and treat it with caution," the report said, adding that China was attempting to win over Japan as its confrontation with the U.S. deepened via "a war of tariff increases." "We would like to refrain from revealing details of individual diplomatic communication," the Consulate-General of Japan in Hong Kong told Newsweek in an email on Wednesday. In late March, China, Japan and South Korea—three of the largest economies in Asia—held a trilateral meeting with the intention of signing a free trade agreement, which they said would be "free, fair, comprehensive, high-quality, and mutually beneficial." Japanese Prime Minister Shigeru Ishiba speaking to reporters at the Prime Minister's Office in Tokyo on April 17. Japanese Prime Minister Shigeru Ishiba speaking to reporters at the Prime Minister's Office in Tokyo on April 17. Franck Robichon/Pool Photo via AP However, China and Japan would face obstacles in coordinating their responses to Trump's tariffs. Beijing has imposed an import ban on Japanese seafood after the release of treated radioactive wastewater from Japan's Fukushima Daiichi nuclear plant into the Pacific Ocean. Another obstacle is the territorial dispute over the Senkaku Islands, a group of islets in the East China Sea that is ruled by Japan but claimed by China as the Diaoyu Islands. What People Are Saying Japanese Prime Minister Shigeru Ishiba said on April 17: "Even as I keep a weather eye on the progress of our ministerial-level consultations, naturally, I am thinking about visiting the United States myself at the most appropriate timing to hold a direct meeting with President Trump." U.S. President Donald Trump said on April 22: "[China has] to make a deal because otherwise they're not going to be able to deal in the United States. So we want them involved, but they have to—and other countries have to—make a deal, and if they don't make a deal, we'll set the deal." A spokesperson for the Chinese Commerce Ministry said on April 21: "China is firmly opposed to any party striking a deal at the expense of the Chinese side. If such a situation arises, China will never accept it and will take countermeasures in a resolute and reciprocal manner. China is determined and capable of safeguarding its own rights and interests." What Happens Next It remains to be seen whether China, which refuses to back down over tariffs, will seek coordination from South Korea, another U.S. treaty ally, to deal with Trump's trade policies.
Forbes
21-04-2025
- Forbes
Prolonged Trade War May Wipe Out 50% Of China's Oil Demand Growth
Tugboats push a crude oil tanker to a reception terminal operated by Sinopec Group on January 30, ... More 2023 in Zhoushan, Zhejiang Province. China. The wider oil market sentiment continues to be bearish given the possibility of a global trade war, potential recessionary headwinds in major demand centers and higher crude production. But the first of these three factors could have an outsized impact on China, according to one market analysis outfit. In a note to clients on Monday, Rystad Energy said a prolonged trade war carries the potential of wiping out half of China's oil demand growth. Were such a scenario to materialize, the slump in global oil prices will likely be inescapably huge. Should downside risks to the country's outlook materialize, Rystad's analysis points to China's projected 2025 oil demand growth of 180,000 barrels per day falling by 50%, 'The ongoing trade war has upended markets' global economic outlook, hitting commodity prices and changing the oil demand outlook. The uncertainties of U.S. President Donald Trump's tariff policies disrupted the markets' original trajectory and posed concerns over the macro economy and demand outlooks,' Rystad told clients. Before Trump Tariffs introduced a seismic shock to the global economy, China's Q1 2025 GDP growth beat expectations at 5.4%, together with other macroeconomic indicators showing growing signals such as exports, the Purchasing Managers' Index and retail sales. 'Strong economic growth in Q1 was also based on last September's stimulus taking effect gradually,' Rystad observed. 'But assuming trade relations between China and the U.S. remain disrupted, we expect a mild scenario is very likely for this year, with China's GDP growth slowing down by one percentage point.' The impact of slower GDP growth on Chinese oil demand growth would be a deceleration of 0.47 of a percentage point, as the economy is still relatively industry- and export-driven, it added. 'With the country set to announce more stimulus in the face of the trade war, we expect some upside potential to offset the negative impact from the trade war and mitigate the oil demand growth loss. Overall, the current estimate indicates a loss of 90,000 bpd growth in oil demand from 180,000 bpd levels.' The research outfit reckons the biggest loss will likely be in diesel and biggest gain in naphtha which may offset 'some' demand loss. Unsurprisingly, petrochemical and diesel demand will bear 'the most downside pressure because of the trade war', as consumer spending and industry prosperity and industry-related transportation will be 'damaged' by potential trade decline. The country's domestic petrochemical feedstock demand could be supported by less dependence on imports amid the elevated tariffs. 'Liquefied petroleum gas demand growth will slow down with a shift towards naphtha demand upside as a potential utilization rate increase of steam crackers will offset the loss from propane dehydrogenation [or 'PDH'] as propane relies on external supply.' But around 100,000 bpd of propane demand will be at risk if the trade war sustains and PDH operators are unable to pivot, with the U.S. dominating supply, Rystad added. Domestic gasoline and jet fuel demand, strongly associated with personal and business mobility, will not be negatively impacted in a mild trade war scenario. 'There could, however, be some restructuring between international and domestic travel and potentially a changed average distance of travel, while some upside potential exists as lower prices are likely to boost consumption,' Rystad concluded. Overall, however short or long a trade war may turn out to be, higher production and lower demand growth implies the crude market may continue to remain rocky for some time yet.
Yahoo
24-03-2025
- Yahoo
China Saves Fiscal Power for Trade War as Spending Progress Lags
(Bloomberg) -- China's government appears in no rush to implement its budget, as Beijing preserves spending power to counter any damage inflicted by higher US tariffs. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Chicago Transit Faces 'Doomsday Scenario,' Regional Agency Says LA Faces $1 Billion Budget Hole, Warns of Thousands of Layoffs New York Subway Ditches MetroCard After 32 Years for Tap-And-Go Libraries Warn They Could Be 'Cut off at the Knees' by DOGE The combined expenditure in the general public budget and the government fund account, China's two main fiscal books, rose to 5.65 trillion yuan ($779 billion) in the first two months, an increase of 2.9% from the same period a year earlier, according to Bloomberg calculations based on data released by the Ministry of Finance on Monday. That's about 13.38% of the outlays planned for the full year by the government, the weakest start to a year since 2022. 'The spending progress slowed slightly, mainly because authorities need to reserve fiscal strength for uncertainties to come to ensure the economy continue to recover,' said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group. China's consumption, investment and industrial production expanded more than economists had expected in January-February, buying Beijing some time before it needs to unleash more stimulus. Policymakers have repeatedly said they have ample room and tools to aid the economy. It's set to come under greater pressure in the coming months once the impact from US tariffs spreads to more Chinese firms while President Donald Trump threatens higher levies. Total income under the two major budgets fell 2.9% to 5.02 trillion yuan in the first two months of the year as tax revenue continued to drop while land sales by local governments slumped by 15.7%. The shortfall between spending and income came in at nearly 622 billion yuan, double the gap seen last year. The deficit was funded by heavy debt issuance, with net government bond financing in January-February hitting nearly 2.4 trillion yuan, a record high for the period. Some of the proceeds were meant to go toward refinancing the so-called hidden debt previously taken by firms affiliated with local governments to fund infrastructure projects. What Bloomberg Economics Says... 'To maximize the impact of the fiscal stimulus announced at the National People's Congress, China must front-load spending in 2025 — breaking an old habit that's hard on the economy. Recent bond issuance running at more than twice the year-earlier amount suggests officials are making efforts to do so.' — David Qu and Chang Shu. For full analysis, click here ANZ's Xing expects fiscal expenditure to accelerate 'significantly' from the second quarter as US tariffs start to take a toll on Chinese exporters and manufacturers. --With assistance from Jing Zhao and James Mayger. (Updates with chart, adds budget deficit data in eighth paragraph.) A New 'China Shock' Is Destroying Jobs Around the World How TD Became America's Most Convenient Bank for Money Launderers The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? Tesla's Gamble on MAGA Customers Won't Work One Man's Crypto Windfall Is Funding a $1 Billion Space Station Dream ©2025 Bloomberg L.P.
