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China’s major refiners have suspended most refined fuel exports for October as Beijing prioritizes domestic supply security, removing another source of diesel, gasoline and jet fuel from an already severely constrained global market.

PetroChina has cancelled several gasoline and jet fuel cargoes scheduled for October, while Zhejiang Petrochemical did not schedule exports during China’s week-long National Day holiday, Reuters reported, citing four people familiar with the matter. Beijing has yet to authorize October exports outside Hong Kong and Macau, although shipments could resume after the holiday ends on October 7 depending on domestic inventories and refinery output.

The move follows a sharp deterioration in China’s own fuel-stock position. Kpler estimates commercial diesel and gasoil inventories are around 20 million barrels below pre-war levels, while gasoline stocks are roughly 9 million barrels short of the threshold Beijing wants restored before allowing exports to normalize.

China had significantly increased exports during the summer. Official customs data showed total oil-product exports reached 6.01 million tonnes in August, up 12.7% year-on-year and the highest since March 2024, according to S&P Global. At the time, Chinese refiners said Beijing had not yet restricted clean-product exports despite tightening domestic supply.

The reversal comes as global diesel supplies are already being squeezed by Middle Eastern disruptions and Ukrainian attacks on Russian refineries. S&P Global warned this week that Asian fuel markets have limited surplus supply, meaning any further restriction on U.S. diesel exports would increase competition for Asian and Middle Eastern barrels.

China’s own government has meanwhile intervened to limit the domestic impact of high international oil prices, partially suppressing scheduled gasoline and diesel price increases in September while instructing refiners to ensure stable supplies.

By Charles Kennedy for Oilprice.com

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