Chinese refiners have suspended refined-fuel exports for October to destinations beyond Hong Kong and Macau, four people familiar with the matter told Reuters, as Beijing puts domestic energy security ahead of overseas sales. The move removes another source of diesel, gasoline and jet fuel from an already severely strained global market.
China entered its week-long National Day holiday on Thursday without giving major refiners in the world's largest refining hub a green light to export fuel products outside Hong Kong and Macau in October, the sources said. State-owned PetroChina cancelled several gasoline and jet fuel cargoes scheduled for October — most of them agreed within the past two weeks — while Zhejiang Petrochemical scheduled no exports at all during the holiday, Reuters reported.
China manages fuel exports through a government quota system: refiners can only ship abroad what Beijing approves. Beijing restricted fuel exports in March after the outbreak of the Iran war disrupted Middle Eastern crude supplies, relaxed the curbs in July, and has since been managing diesel, gasoline and jet fuel shipments on a monthly basis. This is the second shutdown of the year.
Beijing has offered no public explanation. China's National Development and Reform Commission did not immediately respond to a request for comment during the public holiday. But the policy logic is longstanding: domestic supply security is the priority, and international markets are an afterthought.
"It highlights that the government's focus remains domestic supply security," Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies, told Reuters. "Although refiners would like to capitalise on strong export margins, and China theoretically has the capacity to ramp up refining runs and exports, unless domestic stocks are adequate exports will be limited."
Beijing has also moved to shield domestic consumers from high international prices, partially suppressing scheduled gasoline and diesel price increases in September while instructing refiners to ensure stable supplies.
The immediate driver is China's own depleted fuel stocks. Kpler estimates commercial diesel and gasoil inventories sit around 20 million barrels below pre-war levels, while gasoline stocks are roughly 9 million barrels short of the threshold Beijing wants restored before exports can normalize. Until those buffers are rebuilt, the export tap stays closed.
The irony is that Chinese refiners were exporting aggressively just two months ago. 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, refiners said Beijing had not restricted clean-product exports despite tightening domestic supply.
The timing is striking. During Chinese President Xi Jinping's state visit, President Donald Trump urged him to "increase production of refined petroleum products to stabilize global supply," according to a September 25 White House fact sheet. A week later, exports were halted instead.
Energy Secretary Chris Wright acknowledged the loss in the Oval Office on Wednesday: "We've lost diesel exports from China," while noting some Middle Eastern supplies were being restored. American drivers are already feeling it — diesel averaged $6.39 a gallon nationwide on Thursday, up from $3.71 a year earlier, according to the American Automobile Association.
The export halt sent crude sharply higher on Thursday, with Brent closing more than $4 up and WTI gaining over $2. In early Asian trade Friday, Brent stood at $102.60 a barrel and WTI at $93.14, as investors weighed tighter fuel supplies against signs of improving crude flows from the Middle East.
S&P Global warned this week that Asian fuel markets have limited surplus supply, meaning any further restriction on U.S. diesel exports would intensify competition for Asian and Middle Eastern barrels. "The market is taking stock of a distinctly mixed set of signals this week," said Tim Waterer, chief analyst at KCM Trade — a healthier-looking Saudi export picture offset by another U.S. aircraft carrier heading toward the Gulf and China's export curbs.
It is not clear whether Beijing will resume permitting exports after the holiday ends on October 7; the sources said that could depend on domestic fuel inventories and refinery output.
Max Meizlish, a research fellow at the Foundation for Defense of Democracies' Center on Economic and Financial Power, noted China has restricted fuel exports before and rolled back the controls when it served its interests: "China may temporarily restrict fuel, as it did earlier in the war, but then it will relieve those controls to save itself. The world will then see the country as a savior despite the fact that it's actually China saving itself."
For global markets, the takeaway is blunt: with Middle Eastern supply and Russian refining both impaired, losing exports from the world's biggest refining center makes an already painful diesel crunch harder to bear.