China has issued a first batch of crude import quotas for 2026 for smaller independent refiners and big private refiners, with volumes increasing by at least 25% compared with the same allocation last year, according to industry sources.
The new quotas, not yet officially released by Beijing, could help refiners that had used up their 2025 allocations resume imports of Russian and sanctioned crudes from Iran and Venezuela, some already purchased but unable to clear customs.
More refineries, including two big private refiners, received quotas as part of the first allocation for 2026 than in the same period last year, said a China-focused analyst.
Higher Volumes
A first batch ranging between 7.58 million tons (55.56 million barrels) and 7.73 million tons (56.66 million bbl) has been issued, according to multiple China-focused analysts, up from 6.04 million tons (44.27 million bbl) issued in November 2024. Those volumes are counted as part of refiners’ 2026 allocation.
It is unclear if the government frontloaded higher volumes of overall 2026 allocations in this first batch of quotas.
A trader with significant insight into the Chinese crude market believed the increase is due to many independent refiners already running out of 2025 quotas. But some analysts were puzzled by the significant increase.
Beijing’s crude import allocations are awarded to independent refiners, including small players known as “teapots,” as well as some small subsidiaries of state-owned companies and giant new refiners that are keen to replace obsolete teapots.
Domestic refining margins are healthy, said a Chinese refiner and a market source. This could help support refinery runs and, by extension, demand for crude.
But refined product margins are stronger, which benefits Chinese national oil companies that have refined product export quotas, said the market source. China's state oil giants are free to import crude oil.
Crude import allocations were granted to China’s 800,000 barrel per day Zhejiang Petrochemical complex as well as the 320,000 b/d Shenghong refinery and Dongming and Shandong Chambroad (Jingbo) facilities, something that didn’t happen last year, said two market sources.
Bonded Storage
Some independent refiners that had run out of 2025 quotas were forced to slow down, or in some cases stop buying Russian and sanctioned crudes. But it is unlikely that they completely stopped purchases, said a market source.
Some refiners continued to buy such crudes in anticipation of the release of the latest import quotas, said two market sources. Without the allocations, the refiners were unable to discharge cargoes at Chinese ports.
Some of the purchased volumes were likely placed in bonded storage until they could clear customs after the refiners received their import quotas, said a China-focused analyst.
The new quotas are a boost for shipments that have already arrived in Shandong province, where most of China’s smaller independents are based, said a Chinese trader.
Who Got What?
The 400,000 b/d Hengli refinery, Zhejiang Petrochemical, the Sinochem Hongrun facility and the Dongming refinery were the recipients of the largest crude import quotas.
Hengli received a 2 million ton allocation (14.66 million bbl), unchanged from November 2024, said four analysts. Zhejiang and Dongming each received a 750,000 ton import quota ( 5.5 million bbl), they added.
Sinochem Hongrun’s import quota fell to 530,000 tons (3.89 million bbl), a drop of 3.89 million bbl from its allocation in November 2024. The Hebei Xinhai and Lijin refineries each received 350,000 ton quotas (2.57 million bbl), said two analysts.
The Shandong Chambroad (Jingbo), Tianhong and Jincheng refineries each received 300,000 ton quotas (2.2 million bbl), according to four analysts.