As tensions in the Middle East continue to escalate, the Chinese government has ordered the country’s largest refining companies to suspend diesel and gasoline exports and to cancel previously committed export arrangements wherever possible.
According to reports from Bloomberg and other foreign media citing multiple sources familiar with the matter, officials from China's National Development and Reform Commission recently met with executives of refining companies and verbally instructed them to immediately and temporarily halt refined fuel exports.
Sources said that refiners were requested to stop signing new export contracts and to negotiate the cancellation of already agreed export deals. However, this requirement does not apply to aviation fuel supplied to international flights, bonded marine fuel, or fuel supplied to Hong Kong and Macau.
PetroChina, Sinopec, CNOOC, Sinochem Group, and private refiner Zhejiang Petrochemical all need to regularly apply to the government for fuel export quotas. Bloomberg has sought comments from the five companies on this matter, but has not received any response. The National Development and Reform Commission also did not immediately reply to inquiries.
China has large refining capacity, but most of its output is used domestically, so it is not a major source of supply in Asia. However, this new export restriction shows that, amid intensifying Middle East crises, import-dependent regions are generally prioritizing domestic needs.
Since the U.S. and Israel launched strikes over the weekend, almost no crude oil or fuel has been exported from the Persian Gulf, prompting refineries from Japan to Indonesia and India to start lowering their processing rates and suspending exports.