Experts suggest increasing production and reserves of crude oil to fully release refining capacity

Since the beginning of this year, the high fluctuations in international oil prices have brought great impacts to the global market and downstream industries, and the issue of oil and gas energy supply has also attracted great attention
from all parties.
At the 2022 National Petroleum and Chemical Industry Economic Situation Analysis Conference hosted by the China Petroleum and Chemical Industry Federation on August 11, the association and industry experts suggested increasing production and storage of crude oil, relaxing the export of refined oil, and fully releasing the capacity
of domestic refining units.

"Affected by comprehensive factors, the international market prices of crude oil, natural gas and other bulk energy commodities have continued to run at a high level this year, the prices of resource products such as coal, phosphate ore, sulfur, potassium have risen sharply, and the operating costs of enterprises above designated size in the whole industry have risen by more than 20%
year-on-year in the first 5 months.
" Li Shousheng, president of the China Petroleum and Chemical Industry Federation, said
.

Fu Xiangsheng, vice president of the China Petroleum and Chemical Industry Federation, said that the high price of crude oil in the first half of the year promoted the increase in the efficiency of the oil and gas sector, but the impact on the refining sector was greater, and the profit fell by 25.
3%
year-on-year.
Oil price fluctuations have also directly led to shocks in the prices of other bulk raw materials, basic chemicals and grains
.
Since May, the price of crude oil and major petrochemical products has begun to fall, and the decline in June is more pronounced, indicating that the pressure on the price fluctuations of crude oil and major petrochemical products will increase
in the second half of the year.

"This also tells us once again that extending the industrial chain and developing the product structure in the direction of refinement, high-end and functional development is the correct choice for
transformation and upgrading.
" Fu Xiangsheng said
.

In this context, ensuring the safe and stable supply of crude oil in China has become an important issue
.
In this regard, Sun Weishan, vice president of the China Petroleum and Chemical Industry Federation, said that first of all, we must focus on increasing production capacity and accelerating the exploration of domestic resources, especially for the western region and offshore oil and gas fields
.

Sun Weishan believes that efforts should also be made to strengthen reserves, put the construction of the oil and gas reserve system in the same important position as investment in oil and gas exploration and development, and accelerate the formation of an oil reserve system
in which government reserves, corporate social responsibility reserves and production and operation stocks are organically combined and complement each other, and physical reserves, production capacity reserves and other reserve methods are combined.

Sun Weishan said that in addition, efforts should be made to ensure supply and stable prices, promote the structural reform of the refining and chemical industry, continue to make good use of the Shanghai crude oil futures market, on the one hand, strive to obtain greater discourse and pricing power in the international arena, and on the other hand, let enterprises control operational risks
through hedging and other means.

Data show that in recent years, the production and consumption of refined oil products in China have been stable, but exports have declined
year after year.
In the first half of this year, the export volume of refined oil products fell by 54.
7% year-on-year, which was even greater
than that of previous years.

"A large number of refinery capacity that has been built cannot be fully utilized, and the capacity utilization rate of refining units in the first half of this year was only 71%, which is lower than the global average
of 90%.
" Fu Xiangsheng said
.
He suggested that under the premise of ensuring reasonable inventory and ensuring supply in the domestic market, advanced devices and high-quality production capacity with high technical level, high energy efficiency level and low emission should be supported to enter the international market
.