China has imposed new restrictions on exports of refined petroleum products, including diesel, jet fuel, and gasoline, raising concerns about further tightening in already fragile global energy markets. The move, announced this week, comes amid ongoing disruptions to fuel supplies worldwide and follows similar export curbs Beijing implemented earlier this year.
Recent reports from oil analysts familiar with China’s state-owned refining giants indicate that export volumes are being scaled back, with new commercial export permits no longer being granted broadly. While shipments are reportedly continuing to select countries with close political and economic ties to Beijing, such as Cambodia, broader access to Chinese refined products is constrained. Analysts estimate that Chinese exports of refined fuels could fall to around 480,000 barrels per day in October, down from an earlier forecast of 750,000 barrels. If the current curbs persist into November, exports might decline further to approximately 300,000 barrels daily unless Chinese authorities alter their policy.
The timing of China’s export restrictions adds additional pressure to global diesel markets, which are already strained due to a series of supply shocks. This week, Russia renewed a ban on diesel exports after Ukrainian drone strikes damaged several key refineries that supply fuel to Russian forces in eastern Ukraine. Simultaneously, a fire at an Indian refinery prompted the curtailment of some exports to prioritize domestic demand. In the United States, President Donald Trump has threatened to limit diesel shipments to reduce transportation costs ahead of the midterm elections.
Following the reports of China’s export curbs, diesel prices in Singapore—a major energy trading hub in Asia—increased by approximately 5 percent on Wednesday and Thursday. However, crude oil prices declined about 10 percent during the same period. Diesel prices later retreated on Friday following discussions among European countries about potentially releasing diesel from strategic reserves to ease supply tightness. Jet fuel costs in East Asia also climbed, raising concerns about increased operational expenses for airlines in the region.
China’s latest export limitations echo those imposed in March, shortly after the outbreak of the Iran war disrupted oil flows through the Strait of Hormuz. At that time, Chinese exports of refined products fell sharply, exacerbating fuel shortages in several Asian countries. For instance, Vietnam faced jet fuel shortages that led its national airline to cancel flights, while the Philippines and Australia engaged diplomatically with Beijing to address the supply constraints.
Following those earlier curbs, Chinese refined product exports had rebounded by July and increased significantly in August, according to Chinese customs data. Now, as Beijing’s crude inventories shrink and Iranian crude supplies remain inaccessible due to the ongoing conflict, the sustainability of China’s export assurances is uncertain.
Industry analysts remain unclear whether the current restrictions signify a temporary halt or a more prolonged policy shift. Muyu Xu, an oil analyst at commodities research firm Kpler, noted the difficulty in determining Beijing’s long-term intentions regarding fuel exports.
Australia’s Department of Foreign Affairs and Trade stated on Friday that it continues to engage with China and other regional partners to safeguard energy supplies and promote regional energy security amid these market disruptions.