Due to the war in the Middle East: China has suspended exports of diesel and gasoline
5 March 14:18
The Chinese government has ordered its largest refineries to suspend exports of diesel fuel and gasoline, as the war in the Middle East threatens to disrupt global energy supplies.
This was reported by "Komersant Ukrainian" with reference to Reuters.
According to the agency’s sources, the call does not apply to jet fuel for international flights, bunkering for aircraft, or supplies to Hong Kong or Macau.
It is noted that a decline in exports from China, one of Asia’s largest fuel exporters, is likely to exacerbate the situation with limited fuel supplies in Asia, further increasing refining margins.
According to LSEG price data published on March 5, diesel refining margins hovered at a three-year high of around $49 per barrel, while jet fuel crack spreads exceeded $55 per barrel.
With most of the March export program already fixed and cargoes difficult to recall, the new government notice is expected to reduce exports from April.
According to sources, gasoline, diesel, and jet fuel exports were expected to remain stable in March compared to previous industry estimates of around 3.8 million metric tons, as companies enjoyed high margins in Asia.
LSEG vessel tracking data showed that about 70,000 tonnes of jet fuel, 35,000 tonnes of diesel and 35,000 tonnes of gasoline were shipped this month.
China manages refined fuel exports through a quota system to balance fundamental supply and demand in its domestic market, with the first batch of quotas for 2026 little changed from last year at 19 million tonnes.
Three regional buyers of Chinese cargoes told Reuters that they would still receive their March shipments according to previous loading schedules.
At least two Chinese refineries — privately owned Zhejiang Petrochemical Corp and a refinery in Fujian province operated by Sinopec — began cutting production this month, and more are expected to limit output as the ongoing conflict in the Middle East disrupts crude oil flows, leading to a sharp rise in prices.
Fuel prices have risen due to the war in the Middle East
It should be noted that due to the war in the Middle East, shipping in the region has virtually stopped, with volumes falling by 75%. Oil tanker owners are not taking the risk of going to sea.
Although the UAE and Saudi Arabia are trying to “pump” oil through pipelines, this is not enough.
As a result, fuel prices have skyrocketed. India and Iran have already raised the prices of their oil.
According to preliminary forecasts, with oil transportation through the Strait of Hormuz blocked, oil prices could reach $100 per barrel, and that’s not the limit.
It is also known that exchange prices for diesel in London have risen to $1,100 per ton.
