Chinese oil refineries face challenges after the authorities have a maximum to produce the country

Independent oil refineries in China face challenges this year, as Beijing wants to reduce the surplus production capacity in the sector, in addition to the increasing scarcity of crude oil on which these refineries depend. Small businesses owned by the private sector are responsible for more than five amounts of oil in China, many of which are located in the eastern Shandong province. These independent refineries, called ‘Tea Cups’, have a reputation for working intelligently and adapting to the market conditions as they achieve very small profits. But some of these refineries face challenges that make the old tricks or methods you used to achieve profits are ineffective. China is at the top of the list of crude oil importers in the world, and the refineries ‘tea canes’ is the cornerstone of the market that has increased the world’s demand for oil for more than a decade. However, three businesses in Shandong declared bankruptcy at the end of last year, amid the expectation that more businesses will be subjected to financial failure and bankruptcy. “This year, the surplus in the oil market in China will increase. The “tea” refineries face this problem because the economy of China delayed and turned to a transformation after using a more environmentally friendly energy. The blame may be blamed for electric cars, but the demand for fuel types produced by refineries such as gasoline and diesel is a decline. Due to the financial restrictions, the local authorities are no longer ready to support these businesses to pay taxes. The more difficult restrictions on cheap oil subject to sanctions from countries such as Russia and Iran make it difficult for these refineries to obtain this type of oil. China’s attempt to transform its economic growth away from traditional industries (which pollutes the environment) made the refineries a maximum of production capacity at the country level of one billion tonnes annually in 2025. The giant and integrated refineries of high efficiency have been made such as the Shandong Yulong Peetrochemical that started working in September, which has small and less profitable companies, it is probably the victim to reach the victim, and it is likely that it is the victim to reach the victim, and it is likely that it is the victim. profit. The old refineries in Shandong come to the top of this list. According to the report that the integration of companies and refineries could lead to the closure of 6 to 10 million tonnes of country -level production capacity, according to a report presented in Beijing last month, Sinopec state researchers said the largest oil -raffing business in China said that the integration of companies and refineries could lead to the closure of 6 to 10 million tonnes of production. London -based energy aspects in London previously estimated the amount of production capacity closed at 15 million tonnes and in 2025 described as “the normal time to impose more pressure on small refineries”, according to a research note sent to clients in November. Tax collection contains other governmental governmental government provisions, the closure of smaller rough distillation units, which is the first step in oil refinement-by this year. According to Wang Yanting, an analyst with the Chinese consulting company (JLC), approximately 9 million tonnes of production capacity in Shandong alone meet the required limit. Beijing should increase its tax revenue also has consequences for a sector known to pay or evade tax. About 40% of gasoline and diesel sold by ‘tea’ and in China were not sold properly last year, according to China National Petroleum Corp Research, the largest oil company in the country. In September, the Shandong government issued an oral notice of ‘tea’ refineries asking them to restore tax cuts on fuel oil imports, according to people who were familiar with the case, who refused to reveal their identity due to privacy. Fuel oil is a substitute for small refineries that have no shares with the import of crude oil from the government, and according to the company “Mysteel Oilchem” forms about 10% of the materials used by “teakers”. The Shandong government did not respond to the contacts required by the suspension, so it is not clear whether its requests have turned into binding orders, and it is not known that the number of companies they have complied with. But interest in taxes is a sign of anxiety, as the boycott, which relies on the refinement of employment and economic production, is usually treated with ‘tea’ refineries with indulgence or flexibility. The fear in the sector prevails that the most stringent tax accounting can affect the profitability of many companies, which can lead them to exposure to losses. In fact, the three companies that followed up last year, which had a nominal capacity of about 17 million tonnes, specifically faced their fate because they were committed to paying taxes and avoiding the use of oils subject to sanctions, according to celebrity. The ‘teakers’ depend on the cheapest Iranian crude oil and take about 90% of its exports, but prices have increased and the flow has fallen since the United States expanded the sanctions in October over the violations of the shadow fleet transporting oil between Iran and China. The situation facing the Iranian oil sector will get worse if the next Trump administration takes a stricter position in the trade with Tehran. Beijing is perhaps “ready to sacrifice the teakers to record some easy profits against Trump by imposing restrictions on Iranian oil imports,” according to Energy Especs. Tea canes already work 55% or less than their productive capacity, according to “Mi Steel Oil Kim”, and operations are likely to reduce more, or closed refineries for longer periods of maintenance, to tackle the economic challenges and pressure gains. Executive officials and industry traders say some of these businesses would have had trouble staying if they did not get favorable tax and the availability of crude oil is subject to fines at reduced prices.