China urges refiners to suspend fuel exports amid Mideast war
The guidance does not apply to jet fuel refuelling for international flights, bonded bunkering or supplies to Hong Kong or Macau, the industry and trade sources said
China has asked refiners to halt signing new contracts to export fuel and to try to cancel shipments already committed as tight oil supply due to the Iran war curbs refinery output, several people with knowledge of the matter said today (5 March).
The guidance does not apply to jet fuel refuelling for international flights, bonded bunkering or supplies to Hong Kong or Macau, the industry and trade sources said.
China's National Development and Reform Commission did not respond to a request for comment.
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Lower exports from China, one of Asia's biggest fuel exporters, are likely to further tighten fuel supply in Asia, pushing refining margins even higher, as the impact from the war in the Middle East reverberates across the top oil importing region.
Diesel processing margins hovered at three-year highs near $49 a barrel on Thursday, LSEG pricing data showed, while jet fuel cracks were more than $55 a barrel.
Impact on exports expected in April
With most March exports already fixed and the difficulty in recalling cargoes, the new directive is expected to cut into exports from April onwards, the sources said.
For March, exports of gasoline, diesel and jet fuel combined were expected to remain in line with earlier industry estimates of around 3.8 million metric tons, as companies cashed in robust Asian margins, multiple sources said.
LSEG ship-tracking data showed some 70,000 tons of jet fuel (551,600 barrels), 35,000 tons of diesel (260,750 barrels) and 35,000 tons (295,750 barrels) of gasoline have been shipped out so far this month.
China, the world's top oil importer, manages fuel exports with a quota system to balance domestic supply-demand fundamentals, with its first batch of quota issuance for 2026 little changed from a year ago at 19 million tons.
Three regional buyers of Chinese-origin cargoes told Reuters they would still receive their March deliveries in line with earlier loading schedules.
At least two Chinese refineries - privately led Zhejiang Petrochemical Corp and Sinopec-operated Fujian refinery - have begun reducing throughput this month, and more plants are expected to curb output as the Middle East conflict disrupts crude oil flows, sending prices surging.
Domestic diesel, gasoline prices soar
The export suspension comes as domestic Chinese fuel prices rally, with wholesalers stocking up in anticipation of further increases despite little change in end-user demand.
Wholesale diesel gained 13.5% to 7,276 yuan ($1,055.18) per ton between February 28 and March 4, according to Chinese consultancy JLC.
Ex-plant 92-octane gasoline rose 11% at 8,208 yuan per ton on Thursday from a week ago, independent refiner Shandong Chambroad Petrochemical posted on its WeChat account.
"We're busy pushing up prices, hoping to maximise our profits during this period," said a trader with a separate independent plant.
Crude processing rates at plants in Shandong province, the hub for smaller Chinese refineries known as teapots, rose 1.98 percentage points week-on-week at 60.91% as of Wednesday, according to consultancy SCI.
(1 ton = around 7.45 barrels for diesel, gasoil)
(1 ton = around 7.88 barrels for jet fuel, kerosene)
(1 ton = around 8.45 barrels for gasoline)
($1 = 6.8955 Chinese yuan renminbi)
