China Halts Fuel Exports Amid Domestic Inventory Push

China has suspended fuel exports in October, primarily affecting diesel, gasoline, and jet fuel. The move aims to rebuild domestic inventories after authorities intervened. PetroChina canceled some scheduled cargoes of gasoline and jet fuel, while Zhejiang Petrochemical halted shipments during the holiday week.

The decision on whether exports will resume after October 7 depends on domestic fuel stocks, crude oil availability, and refinery output. China's commercial diesel inventories are estimated to be around 20 million barrels below the level considered sufficient for exports to resume, while gasoline stocks are about 9 million barrels below that threshold.

Disruptions in Middle Eastern crude oil and fuel supplies, as well as lower Russian refining output, already put pressure on Asian market availability. Expectations of reduced Chinese exports pushed the October-November Asian diesel spread to a two-week high. Singapore, Malaysia, Australia, Vietnam, Bangladesh, and the Philippines were among the main buyers of Chinese fuel in September.