China has limited most of its refined fuel exports for October, prioritizing domestic supply security amid a global diesel crunch. This decision, primarily affecting gasoline and jet fuel shipments, was confirmed by industry insiders familiar with the situation.
The suspension coincides with China's National Day holiday, which runs until October 7. During this period, PetroChina canceled several scheduled cargoes, and Zhejiang Petrochemical refrained from planning any exports. Although exports to Hong Kong and Macau continue, further shipments will depend on domestic inventory levels and refinery output after the holiday.
China's internal fuel stock levels have sharply declined, contributing to the export halt. Commercial diesel and gasoil inventories are approximately 20 million barrels below pre-war levels, while gasoline stocks are nine million barrels short of the target Beijing aims to restore before resuming normal export activities.
In contrast, China had increased its fuel exports significantly over the summer. Official customs data revealed that total oil-product exports reached 6.01 million tonnes in August, marking a 12.7% year-on-year increase and the highest level since March 2024. Despite this surge, Chinese refiners noted that Beijing had not restricted clean-product exports until now, even as domestic supplies tightened.
The global diesel market is already under pressure due to disruptions in the Middle East and Ukrainian attacks on Russian refineries. S&P Global has warned that Asian fuel markets have limited surplus supply, and any further restrictions on U. S. diesel exports could intensify competition for Asian and Middle Eastern barrels.
The United States has urged Germany and France to release emergency diesel inventories to alleviate the supply squeeze. Washington wants the European Union to release emergency reserves to help buffer against the supply squeeze. Diesel prices have surged in both the U. S. and the EU.
In response to high international oil prices, the Chinese government has intervened to mitigate the impact on domestic markets. Beijing partially suppressed scheduled gasoline and diesel price increases in September and instructed refiners to ensure stable supplies. This move aligns with China's ongoing strategy of state control over fuel pricing.
In May 2026, China raised the maximum retail price of gasoline by $11.03 per metric ton and diesel by $10.29 per ton, effective May 22. This adjustment was part of a series of increases following the Iran war, which has disrupted global oil markets.
The suspension of China's fuel exports adds further strain to the global market. The timing of this decision places additional pressure on a market where diesel cracks have already surged. Bloomberg reported that the NYMEX one-month heating-oil/crude spread breached $100 per barrel, later rising to nearly $106. This historic increase highlights the deepening crisis caused by refinery outages in Russia, restrictions on industrial fuel exports, and ongoing disruptions through the Strait of Hormuz.
Whether China resumes its fuel exports will depend on the state of domestic inventories and refinery output after the National Day holiday. The global market will be watching closely, as any changes could significantly impact the already strained diesel supply chain.
