The oil map is being redrawn and China's emergence as a global product exporter is a big part of it, said Antoine Halff, head of the IEA oil market unit and the editor of the Medium-Term Oil Market Report. 'There has always been a risk for refiners to overshoot or undershoot in their expansion plans. It looks like China might now be at risk of overshooting. The result could be more motorists in more parts of the world filling up with gasoline made in China.'

China's growth in oil demand is showing signs of slowing down, the International Energy Agency says in a recent report, raising questions about how the country will use the significant expansion of domestic refinery capacity under way.

Medium-Term Oil Market Report 2012 reduces the IEA estimate of Chinese demand growth prospects for 2012-2017 to 2.1 million barrels a day (mb/d). That reduces the forecast for 2016 by a full 1 mb/d from what was expected two years ago. In contrast, the IEA estimates that China will increase its refining capacity by as much as 2.9 mb/d over the next five years. China's economic growth, the primary variable for Chinese oil demand forecasts, is difficult to predict. But assuming that the IEA is correct in its more conservative reconsideration of the economy, that suggests that China might end up with excess refining capacity. That surplus could position it to expand its footprint as a global player in refined products.

And the IEA's forecast of Chinese refining capacity expansion is even more conservative than its demand forecast. PetroChina, as well as many other market analysts, say they expect even more capacity growth than the IEA projection, with the national oil company having forecast earlier this year that Chinese distillation capacity would rise by about a third to reach 15 mb/d by 2015.

Significant expansion could position China to become not only a regional exporter, but a global one as well. In 2011, the country averaged less than 50 000 barrels a day (50 kb/d) of net exports of gasoline and similar products, while not producing more than it needed to meet domestic demand for middle distillates like kerosene or diesel. But the country averaged net imports of 250 kb/d of fuel oil.

If China imported crude oil for refining at the expense of other, less competitive, regions, it could in theory produce a surplus of 1.2 mb/d of products as of 2017. Potentially building up to that, the government recently granted the first foreign-financed project permission to buy and sell oil products for export. The planned Tianjin Refinery, a joint project by Rosneft of Russia and CNPC of China, is also expected to supply the domestic market.

Chinese firms are already increasing their use and ownership of independent storage facilities in Europe and the Caribbean as well as elsewhere in Asia.