Dozens of oil tankers do not know where to go after the "defeat" of a number of oil refineries in China

Chinese authorities are taking tough measures against private oil refineries (refineries) in an effort to close tax loopholes and reduce pollution. About a quarter of the country's large oil refining capacity is accounted for by these independent enterprises, known as "dummies", writes the American Internet publication OilPrice.

Beijing has given private refineries the smallest crude oil import quota since 2015, when dummies were allowed to buy crude directly. This blow to much of the country's refining capacity is causing serious disruptions to the region's crude oil supply chain.



This "defeat" has become a problem not only for the supply of oil to insatiable China, but also for those countries that supply raw materials to the world's largest importer. Because of the "repression" undertaken, dozens of oil tankers have accumulated near key ports in Asia, as they do not know where to go.


- reported by Bloomberg.

Some tankers brought oil from Iran and Venezuela, which are under US sanctions. Now it is difficult for them to find another buyer for their product.

The situation is exacerbated by the introduction of a consumption tax in China in June. With the stated aim of combating environmental pollution, the tax affects bitumen mixtures used for road construction, which have historically served as a cover for the supply of Iranian and Venezuelan oil to the PRC. The tax has also hit hard on imports of bitumen, which have dropped 80% since their peak in May.

Over the past five years, dummies have become a major force in China's energy sector. The current "economic repression "has a double purpose. They are needed to strengthen oversight, enforce law and reduce tax evasion, fuel smuggling and environmental violations, Chinese officials said. However, unofficially, these measures serve to take control of private refineries, which in Beijing's eyes have become too large, influential and independent.