China’s independent oil refineries, known as “teapots”, are gaining in market share as a slowing economy rewards their more flexible business model, piling further pressure on margins at the country’s beleaguered oil majors. The teapots, which account for 20 per cent of China’s refining capacity, are responsible for a growing slice of imports after Beijing granted them import quotas last year. They are running at higher operating rates and contributing to a wave of diesel exports as China’s refining capacity outpaces its fuel demand. Their success is a surprise reversal after years of attempts by Beijing to squeeze the teapots out of the market by limiting their access to bank loans and crude supply. “What happened? The economy slowed,” said Zhang Liucheng, director of Dongming Petrochemical, one of the largest of the teapots. The teapots’ lower operating cost allows the country to stay supplied with cheaper fuels, cushioning the impact of slowing economic growth in the provinces. Dongming is one of 16 teapots that earlier this year formed a coalition for importing oil, booking purchases of spot crude from the Middle East and the Americas.