Oil tanks in Hong Kong
Chinese teapots bag cheap crude
Canadian and Iranian barrels being snapped up by China’s smaller refineries amid weaker domestic demand
China’s so-called teapot refineries—small and simple processing facilities that are mostly privately owned—are buying more Canadian and Iranian barrels as they look towards lower-cost sources for succour from lean or even negative margins. The Chinese buying comes amid a slowdown in domestic oil demand, and as both Ottawa and Tehran brace for potential trade friction from President-elect Trump’s incoming administration. The teapots represent one-quarter of China’s refining capacity and are clustered in the eastern province of Shandong. They have been steady buyers of Canadian heavy sour crude exported from the country’s Pacific coast in the six months since the Trans Mountain Expansion (TMX)
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