Thailand’s energy sector is expected to remain resilient in 2H26, despite concerns over China’s higher refined product export quotas, according to CLSA’s latest sector outlook.
Although China’s export quotas for gasoline, diesel, and jet fuel have increased—set at 19 million tonnes and 18 million tonnes in the first and second batches of 2026—the actual export volumes have consistently fallen short of these ceilings, with only 6 million tonnes and an estimated 3.3 million tonnes shipped so far this year.
China operates a quota system to manage domestic fuel supply and demand, mainly benefiting state oil giants like Sinopec, Sinochem, CNOOC, and PetroChina. Despite larger quotas, China has curtailed exports since March amid ongoing Middle East tensions to ensure stable domestic supply.
CLSA expects the third quota batch—anticipated in September—will likely mirror the previous allocation, with significant export volumes only reaching the market by end-3Q26 at the earliest due to production and delivery lead times.
Chinese refinery utilization stood at an average 71% in 1H26, with smaller “Teapot” refineries lagging at 53%, especially in June. With the reopening of the Strait of Hormuz and greater crude supply, CLSA anticipates a rebound in Chinese run rates in 3Q26.
Thai refiners are predicted to post robust Gross Refining Margins (GRM) in 2Q26, ranging from $16-18 per barrel, up from $12-13 per barrel in the previous quarter. This positive outlook is supported by strong crack spreads for gasoline, diesel, and jet fuel, although crack spreads have softened in recent weeks.
Despite a probable stock loss in 2Q26 from declining oil prices, overall earnings visibility for refiners remains intact, with lower crude prices expected to bolster oil consumption.
CLSA maintains a positive stance on Thai refiners, especially TOP, BCP, IRPC, and PTTGC, noting that IRPC and PTTGC have greater petrochemical exposure relative to their refining operations.
