China’s Teapot Refiners Slash Output as Hormuz Crisis Crushes Margins

Some independent refiners in China are reducing their production rates as margins shrink and demand weakens amid the continued paralysis of tanker traffic in the Strait of Hormuz. Citing unnamed trade and industry sources, Reuters reported today that the average operating rates at so-called teapots in Shandong had fallen to 50%, from 55% in April. What’s more, the operating rates of independent refiners are likely to fall further as the war drags on, and refiners swing into losses that the Reuters sources estimate at between $74 and $88 per…