These spot market acquisitions follow a period of extreme caution among Chinese buyers. Earlier this year, both state-owned and independent refiners retreated from overseas markets as benchmark prices climbed toward $100 per barrel. Instead, they relied on existing inventories and significantly throttled processing rates, which hit their lowest levels since 2017 last month. High feedstock costs and sluggish domestic fuel consumption had previously squeezed profit margins to unsustainable lows.

Market dynamics have shifted as Gulf producers increase output and the geopolitical risk premium associated with the Strait of Hormuz fades. This cooling in prices has provided a window for private refiners, known as teapots, to replenish supplies. Simultaneously, Beijing is loosening long-standing restrictions on fuel exports. Authorities recently authorized state-owned refiners to export 800,000 tons of refined products this month, an increase from June’s allocation, though still significantly below the levels seen during the same period last year.