China's Major Refiners Halt All Petroleum Product Exports in October: "Domestic Supply Comes First"

[Financial News] Major Chinese refiners mostly suspended petroleum product exports in October, making domestic supply stability their top priority. The move is expected to further worsen supply shortages in global diesel, gasoline and jet fuel markets.
On Oct. 1 local time, energy-focused outlet Oilprice.com reported, citing sources, that PetroChina had canceled several gasoline and jet fuel cargo shipments scheduled for October. Zhejiang Petrochemical also did not schedule any exports during the National Day holiday. Chinese authorities have yet to approve October exports to destinations other than Hong Kong and the Macau Special Administrative Region. After the National Day holiday, they plan to review inventory levels and refinery operating rates before deciding whether to resume exports.
Foreign media outlets took note of the decision, saying the export ban had been leaked through traders without an official announcement.
The move came as fuel inventories in China declined sharply. According to energy analysis firm Kpler, China's commercial inventories of diesel and kerosene are about 20 million barrels below their levels before the Iran war in February. Gasoline inventories are also about 9 million barrels below the benchmark set by authorities for normalizing exports.
Chinese refiners had sharply increased petroleum product exports as recently as last summer. According to S&P Global, China's total petroleum product exports in August rose 12.7% from a year earlier to 6.01 million metric tons, the highest level since March 2024.
Global diesel supply chains were already strained by recent logistics disruptions in the Middle East and Ukrainian attacks on Russian refineries. China's export suspension has added to the pressure on the market. S&P Global warned that spare supply in Asian fuel markets is limited, and competition for supplies from Asia and the Middle East will intensify if U.S. diesel exports are also restricted in the future.
Foreign media outlets reported that the decision by Chinese refiners demonstrates that their influence has grown comparable to that of meetings of the Organization of the Petroleum Exporting Countries (OPEC). They added that the Chinese government is likely to use this influence as leverage going forward.


[email protected] Yoon Jae-jun Reporter