China  is  highly  likely  to  restrict oil product exports in the first half of 2017 to flat or 

below H1 2016 levels amid growing focus on pollution control, curbing excess capacit

y and international trade flows, sources with knowledge of the matter said this week. 

The total export quota for the second quarter was likely to be calculated based on th

e actual outflow in H1 2016 minus the quota allocated in Q1 2017, a Beijing-based s

enior product trader with a state-owned oil giant said. 

China  exported 16.817 million mt of oil products in H1 2016 and awarded 12.4 millio

n mt of quotas in Q1 2017, implying that the Q2 2017 oil product export quotas will b

e somewhere between 4 million mt to 5 million mt, according to calculations by sourc

es. 

This is only one  third  the  volumes allocated in Q2 2016, which was at 14.59 million 

mt, and  is  a continuation of the trend seen in Q1, when the quota allotted was 40% 

below Q1 2016's 20.93 million mt. 

Sinopec is estimated to get around 3 million mt quota in Q2 -- mostly for jet fuel, Petr

oChina around 1.2  million mt, while Sinochem and CNOOC are likely to get 450,000 

mt each, according to two Beijing-based product traders with state-owned companies. 

Independent refineries are unlikely to be on the quota allocation list, they said. 

"This  is  a  rough  estimate  for  each company, which could be different from the act

ual allocation. But I am quite sure the actual quota will be cut significantly from last ye

ar to cap the outflows," one of the Beijing-based traders said. 

This  is  a  mandate from the country's top planner, the National Development and Re

form Commission, and  the  NDRC  is  likely  to  introduce controls over total export vo

lumes, he added.