China Suspends Fuel Shipments as Global Markets Tighten

China Orders Halt on New Fuel Exports Amid Middle East Crisis

Amid escalating tensions in the Middle East that have severely restricted movement through a major global oil and fuel passage, Chinese authorities have instructed domestic energy firms to pause any new fuel export agreements and attempt to withdraw from existing overseas fuel shipments.

According to unnamed industry insiders cited by Reuters, Beijing’s directive to fuel exporters does not apply to jet fuel contracts for international flight refueling or to bunkering fuel deals.

Bloomberg also reported that the Chinese government demanded the suspension take effect immediately. This move indicates that, despite China’s substantial oil reserves—built up last year at nearly one million barrels per day—officials are concerned about maintaining domestic fuel supplies.

China ranks among Asia’s top three fuel exporters, alongside South Korea and Singapore, and its competitive refining sector has challenged others in the region. The halt in Chinese fuel exports could have benefited other Asian refiners, but the current disruption in crude oil supply, largely due to blocked shipping lanes in the Strait of Hormuz, has left almost no outbound tanker traffic, according to Bloomberg.

Recent Fuel Export Quotas and Shipments

In December, China’s government allocated its first round of fuel export quotas for the year, covering gasoline, diesel, and jet fuel. Additionally, quotas were granted for 8 million tons of low-sulfur bunkering fuel. Over 70% of these quotas were assigned to state-owned giants Sinopec and CNPC, who together received permissions to export 13.76 million tons of gasoline, diesel, and jet fuel.

Data from LSEG, referenced by Reuters, shows that since the beginning of the month, Chinese refiners have already shipped approximately 70,000 tons of jet fuel, 35,000 tons of diesel, and 35,000 tons of gasoline abroad.