China Eases Fuel Export Curbs as Global Supply Crunch Deepens

DeepensChina has partially lifted fuel export restrictions imposed earlier this year, allowing refiners to export 2.7 million tons of oil derivatives to destinations excluding Hong Kong and Macau, Reuters has reported, citing unnamed sources with knowledge of the matter.

The temporary easing of export caps will be in effect this month, but refiners would also be allowed to roll some of the volumes over to September if they fail to secure purchase deals for the whole allotment. The new export quotas cover gasoline, diesel fuel, and jet fuel. Late June reports said the Chinese government would only allow state refiners to export 800,000 tons of refined fuels in July.

The Chinese government moved to ban all fuel exports days after the conflict in the Middle East erupted and led to the closure of the Strait of Hormuz. This deepened an already severe fuel supply crunch, with the exception of some volumes shipping out to certain countries in Southeast Asia.

At the time, China told energy companies to suspend new fuel export contracts and try to cancel already arranged fuel shipments abroad as global fuel markets tightened amid the Middle Eastern war that effectively froze most traffic through one of the world’s biggest oil and fuel chokepoints.

In April, China eased the export restrictions as domestic fuel stockpiles soared, quelling concern about the security of fuel supply for the domestic market, thanks in no small part to China’s record stockpile of crude oil, estimated at over a billion barrels at the start of the Middle East war.

In June, China’s fuel exports shot up, with fuel oil sales abroad specifically surging by 18% on the year and hitting the highest level since the start of 2026, reaching 577,000 barrels daily amid a global scramble to secure the fuel that powers ships.

Source: Oilprice