China’s recent suspension of oil product exports to countries outside Hong Kong and Macau is causing tightening fuel supplies across Asia, influencing market dynamics and prompting responses from several regional players. The restrictions, implemented earlier this month, hit major fuel buyers including Singapore, Malaysia, and Australia, and are exerting upward pressure on fuel prices amid ongoing global energy market disruptions.

Data from analytics firm Kpler shows Singapore, a key regional trading hub where gasoline is blended and re-exported, experienced a significant drop in gasoline imports from China. Between January and September 2026, Singapore imported 1.772 million metric tonnes of Chinese gasoline—62% less than the total volume imported throughout 2025. Consequently, Singapore’s light distillate stocks have fallen to the lowest levels recorded in five years. With Indonesia as a primary destination for re-exported gasoline, regional energy companies are monitoring the evolving situation closely. Muhammad Baron, spokesperson for Indonesian state energy firm Pertamina, noted that the company maintains a diversified supply portfolio while also enhancing domestic fuel production and biofuel initiatives to mitigate import reliance.

While jet fuel accounts for the majority of China’s oil product exports, most shipments are directed to Hong Kong, which is exempt from the new export curbs. Australia has become the second-largest importer of Chinese jet fuel this year, trailing Hong Kong, followed by Vietnam, Japan, and Malaysia. However, Australia’s government indicated on Friday that the country’s fuel reserves remain sufficient. Officials reported a 42-day supply of petrol—110% above mandated levels—and jet fuel stocks covering approximately 29 days, considered within normal ranges. Furthermore, 45 vessels carrying fuel are en route to Australia, delivering an estimated 35 billion litres within the next four weeks. Industry analysts suggest China’s restrictions will have a limited direct impact on Australia, as the country primarily imports diesel from South Korea, Taiwan, Brunei, and Malaysia, rather than China.

The curbs have contributed to heightened Asian jet fuel prices, which have strengthened relative to diesel, pushing the price spread to roughly $2 a barrel—the highest since mid-July. In contrast, diesel margins eased slightly following a decline in European gasoil futures amid expectations of increased supplies. This divergence coincides with discussions within the European Union about releasing additional diesel reserves, sparked in part by US calls to ease surging fuel costs.

China’s withdrawal from significant participation in the international oil product market is reshaping global fuel trade flows. According to industry experts, the robust jet fuel prices in Asia compared with Europe have effectively closed the arbitrage window that once allowed shipments from South Korea and Singapore to Europe, reversing a trend that had been in place as recently as three weeks ago. This shift is impacting not only countries directly importing Chinese fuel but also broader refinery margins and pricing structures across major global markets, underscoring the extensive ripple effects of China’s export policy changes on the energy sector.