China refiners told to cut output to 80% of last year's average

Key facts

• Independent refineries in Shandong province instructed to reduce output.
• Output cut to no lower than 80% of last year's monthly average.
• Directive impacts independent refineries, known as 'teapots'.
• This could lead to lower global crude oil demand.

This directive from Chinese authorities signals a potential shift in crude oil demand, as these independent refineries, often referred to as 'teapots', are significant consumers of imported crude. A mandated reduction in their processing could lead to lower demand for crude oil globally, potentially impacting prices. China is reportedly drawing down its oil stockpiles as imports have reached a decade-low, raising concerns about the global energy market.