China's Fuel Inventory Decline Sparks Export Curbs Fears

China's diesel fuel and gasoline inventories have been declining steadily in recent weeks. According to data from Chinese commodity market research firm JLC International, state-owned energy majors saw a 2.9% dip in gasoline inventories last week, the lowest level since 2022. Diesel inventories are also at their lowest point in 15 months, down by 2.4% last week.

This decline in fuel stocks has led Energy Aspects analyst Jiana Sun to warn of an increasing risk that Beijing could restrict monthly clean product exports to around 1.2 million tons in the fourth quarter. China imposed export curbs on fuel producers earlier this year, when the U.S. and Israeli war on Iran sparked doubts about the security of fuel supply.

In March, Beijing told energy companies to suspend new fuel export contracts and try to cancel already arranged fuel shipments abroad as global fuel markets tightened. This move added significant growth in exports, especially in fuel oil, which hit a 2026 high in June. However, if China moves to limit fuel exports now, it would add insult to injury in a global market already facing diesel shortages.