China Restricts Diesel, Jet Fuel and Gasoline Exports Amid Global Fuel Supply Pressures

China has started limiting exports of refined products again as its own inventories of crude oil and refined products have dwindled.

1. New Export Restrictions: China has again tightened exports of diesel, jet fuel and gasoline, with state-owned oil companies slowing shipments and the government reportedly withholding new commercial export permits for wider global markets.

2. Exports to Close Partners Continue: Shipments are still continuing to countries closely aligned with Beijing, including Cambodia, while exports to broader international markets are being restricted.

3. Echo of Earlier Restrictions: The move resembles restrictions imposed by China in March 2026 following disruptions to oil flows through the Strait of Hormuz. Those curbs were subsequently eased.

4. Global Diesel Supply Already Tight:

o Russia renewed its diesel-export ban after Ukrainian drone attacks damaged refineries.

o An Indian refinery fire led to some refined-product exports being halted to prioritize domestic demand.

o The United States is considering restrictions on diesel exports to reduce domestic fuel costs.

5. Diesel Prices Rise: Chinese restrictions pushed Singapore diesel prices up about 5% on Wednesday and Thursday, even as crude oil prices fell nearly 10%.

6. Prices Subsequently Ease: Diesel prices later returned to around $170 per barrel after European countries discussed releasing strategic diesel reserves.

7. Jet Fuel Impact: Jet fuel prices have also increased in East Asia, potentially raising airline operating costs and passenger fares. Fuel is one of airlines' two major expenses, alongside labour.

8. Estimated Reduction in Chinese Exports: According to Argus analyst Tom Reed, China's refined-product exports could fall to around 480,000 barrels/day in October, compared with an earlier forecast of 750,000 barrels/day.

9. Potential November Reduction: After refiners use remaining September export quotas, exports could decline further to around 300,000 barrels/day in November, unless Beijing changes its policy.

10. Duration Uncertain: Kpler analyst Muyu Xu said it remains unclear whether China has imposed a lasting export halt or whether approval of new licences has simply been delayed because of China's week-long national holiday.

11. Sinopec Production Cuts: Sinopec, China's largest refiner, had reportedly informed industry experts that it would reduce production and exports from October following a directive from China's National Development and Reform Commission (NDRC).

12. Concern Over High Crude Prices: China's decision partly reflects concern about rising crude prices. As the world's largest oil importer, China is wary of encouraging refiners to purchase additional expensive imported crude.

13. Rising Domestic Diesel Demand: Domestic diesel consumption is also increasing during China's autumn harvest, adding pressure to available supplies.

14. Iranian Crude Supply Disruption: China's smaller private refiners have traditionally relied heavily on discounted Iranian crude. However, seaborne Iranian crude shipments arriving in China have reportedly dried up over the past two months because of an American naval embargo outside the Persian Gulf.

15. Private Refiners Draw Down Stocks: Private refiners continued operating at full capacity through September, using existing crude inventories to benefit from high refined-product prices.

16. Earlier 2026 Experience: During the Iran war, Chinese refined-product exports fell to around 300,000 barrels/day between April and June, causing concern among Asian countries dependent on Chinese fuel supplies.

17. Regional Impact: Vietnam, the Philippines and Australia had previously sought Chinese cooperation over fuel or other export restrictions. Vietnam experienced jet-fuel shortages severe enough to cause flight cancellations.

18. Exports Had Recovered: Chinese exports of gasoline, jet fuel and diesel recovered to prewar levels in July and nearly doubled in August, according to Chinese customs data.

19. Current Risk: With Chinese fuel inventories declining and Iranian crude supplies remaining constrained, the latest restrictions could again tighten refined-product availability across Asian and global energy markets.

20. Australia's Response: Australia said it continues to engage with China and other countries, with a focus on securing energy supplies and supporting regional energy security.

Key Trade & Energy Impact

China's refined-fuel export restrictions + Russian diesel ban + Indian refinery disruption + Iranian crude-supply constraints are occurring simultaneously, increasing pressure on the Asian diesel and jet-fuel markets and creating uncertainty over regional fuel availability and prices.

[ABS News Service/03.10.2026]

China is again restricting exports of diesel, jet fuel and gasoline, threatening to squeeze global energy markets already strained by fuel supply disruptions.

China’s state-owned oil giants have recently started slowing exports of refined products, according to oil analysts in regular contact with the companies. Shipments are continuing to countries with close ties to Beijing, including Cambodia, but the government has stopped granting new commercial export permits to wider global markets.

The move echoes restrictions Beijing imposed in March after the war in Iran disrupted oil flows through the Strait of Hormuz. The sudden drop in Chinese fuel exports sent Asian countries scrambling for alternative supplies. Those restrictions were eventually eased. But this time, the curbs come as diesel markets are already contending with diminished supply.

Russia this week renewed a ban on diesel exports after Ukrainian drone attacks damaged refineries that also supply fuel to Russian forces in eastern Ukraine. A fire at an Indian refinery on Tuesday prompted its owner to halt some exports of refined products, including diesel, to prioritize domestic customers. And in the United States, President Trump has threatened to restrict diesel exports so as to lower costs for truckers ahead of the midterm elections.

China’s latest move sent diesel prices up 5 percent on Wednesday and Thursday in Singapore, Asia’s main energy trading hub, even as crude oil prices fell almost 10 percent. Diesel prices gave up their gains on Friday, returning to about $170 a barrel after European countries discussed whether to release diesel strategic reserves into the market.

Jet fuel prices have also climbed in East Asia, raising the prospect of higher airline costs and ticket prices. Fuel is one of the two main expenses for airlines, along with labor.

China’s restrictions amount to “a significant tightening of the diesel market at a time when the diesel market is already in crisis,” said Tom Reed, a longtime specialist in China’s oil policies at Argus, a commodities pricing and energy research firm in London.

Mr. Reed estimated that the restrictions would reduce China’s exports of refined products to 480,000 barrels a day in October, from an earlier forecast of 750,000 barrels. After refiners exercise export quotas left over from September, shipments could fall to 300,000 barrels per day in November unless Beijing changes course, he added.

Uncertainty remains about how long the restrictions will last. Muyu Xu, an oil analyst at Kpler, a commodities research and ship-tracking firm, said it was unclear whether Beijing had imposed a lasting halt or had delayed approving new export licenses because of a weeklong national holiday that started on Thursday. The market may have to wait until next week for a clearer signal, she said.

“They’ve still got time to reassess the situation,” she said.

Reuters reported earlier that Chinese refiners had suspended exports of oil products beyond Hong Kong and Macau until further notice.

The country’s largest refiner, China Petroleum and Chemical Corporation, or Sinopec, told industry experts last month that it would begin curbing production and exports in October in response to a directive from the National Development and Reform Commission, China’s main economic planning agency.

The company did not immediately respond to a request for comment.

The decision reveals, in part, Beijing’s concern about rising crude prices. China is the world’s largest importer of oil, and officials are wary of encouraging refiners to buy more crude when global prices are high. Domestic diesel demand is also rising during China’s autumn harvest.

Sinopec, which relies heavily on imported crude, has already started reducing its exports. Its main rival, PetroChina, relies more on domestic crude. Both companies are majority-owned by the Chinese government, but some of their shares are publicly traded. PetroChina did not respond to phone calls or an email for comment.

Another pressure is coming from Iran.

For years, China’s smaller private refineries have bought almost all of Iran’s crude oil exports at steep discounts, despite Western sanctions intended to pressure Tehran over its nuclear program. Those refiners sell diesel, gasoline and jet fuel primarily inside China, leaving the large state-owned refiners with more fuel available for export.

But seaborne shipments of Iranian crude arriving in China have dried up over the past two months because of an American naval embargo outside the Persian Gulf. The private refiners kept running at full capacity through September, Mr. Reed said, drawing down crude inventories to take advantage of high prices for refined products.

China faced a similar squeeze earlier this year. In the early days of the war in Iran, Beijing restricted oil-product exports from mainland China with a few exceptions, including Hong Kong and Macau and a few closely aligned countries. Chinese exports of refined products fell to about 300,000 barrels a day from April to June, alarming Asian countries that rely heavily on Chinese refineries.

Vietnam, the Philippines and Australia were among those that appealed to Beijing. Vietnam faced a jet fuel shortage that forced its national carrier to cancel flights. In the Philippines, the agriculture secretary pressed China’s ambassador over restrictions on fertilizer exports. Australia’s foreign minister traveled to Beijing in April, an appeal that was followed by a broader Chinese commitment to cooperate with Australian companies.

Chinese exports of gasoline, jet fuel and diesel recovered to prewar levels in July and nearly doubled in August, according to Chinese customs data.

Now, those assurances are being tested as China’s inventories shrink and Iranian crude remains unavailable.

In a statement on Friday, a spokesperson for Australia’s Department of Foreign Affairs and Trade said it continued to “engage with China and other countries” and was focused on securing energy supplies and supporting regional energy security.