China asks exporters to halt new refined fuel export deals as Middle East conflict disrupts supply
The directive does not apply to jet fuel used for international flight refuelling, bonded marine bunkering, or fuel supplies destined for Hong Kong and Macau
- Mar 5, 2026,
- Updated Mar 5, 2026 11:35 AM IST
China has instructed companies to pause signing new contracts for refined fuel exports and to try cancelling shipments already committed, as the widening conflict in the Middle East begins to disrupt refinery output and global energy flows, several industry and trade sources said on Thursday.
However, the directive does not apply to jet fuel used for international flight refuelling, bonded marine bunkering, or fuel supplies destined for Hong Kong and Macau.
The National Development and Reform Commission (NDRC) did not immediately respond to requests for comment.
Impact on Asian fuel markets
China is one of Asia’s largest exporters of refined fuels, and any reduction in shipments could further tighten supplies across the region.
Lower exports are expected to intensify an already tight fuel market in Asia, pushing refining margins even higher.
According to LSEG pricing data, diesel processing margins were hovering near three-year highs of about $49 per barrel on Thursday, while margins for jet fuel, known as jet cracks, were above $55 per barrel.
Export impact expected from April
Industry sources said the impact of the government’s communication will likely begin to show from April onwards, as most export cargoes scheduled for March have already been fixed and are difficult to recall.
For March, combined exports of gasoline, diesel and jet fuel are still expected to remain broadly in line with earlier projections of around 3.8 million metric tons, as companies move to capitalise on strong regional margins.
Ship-tracking data from LSEG shows that so far this month, China has already exported about 70,000 tons of jet fuel, 35,000 tons of diesel and 35,000 tons of gasoline.
Three regional buyers of Chinese fuel cargoes told Reuters they expect to receive their March shipments in accordance with previously agreed loading schedules.
Refineries begin cutting output
China regulates refined fuel exports through a quota system, designed to balance domestic supply and overseas sales.
The government’s first batch of export quotas for 2026 was set at 19 million tons, little changed from the previous year.
Meanwhile, some Chinese refineries have already started reducing production as crude supply disruptions linked to the Middle East conflict push oil prices higher.
Privately run Zhejiang Petrochemical Corp and Sinopec’s Fujian refinery have both begun trimming throughput this month, according to sources.
Industry insiders expect more refineries to scale back operations if crude oil supply disruptions from the Middle East persist and global prices continue to surge.
(With inputs from Reuters)
China has instructed companies to pause signing new contracts for refined fuel exports and to try cancelling shipments already committed, as the widening conflict in the Middle East begins to disrupt refinery output and global energy flows, several industry and trade sources said on Thursday.
However, the directive does not apply to jet fuel used for international flight refuelling, bonded marine bunkering, or fuel supplies destined for Hong Kong and Macau.
The National Development and Reform Commission (NDRC) did not immediately respond to requests for comment.
Impact on Asian fuel markets
China is one of Asia’s largest exporters of refined fuels, and any reduction in shipments could further tighten supplies across the region.
Lower exports are expected to intensify an already tight fuel market in Asia, pushing refining margins even higher.
According to LSEG pricing data, diesel processing margins were hovering near three-year highs of about $49 per barrel on Thursday, while margins for jet fuel, known as jet cracks, were above $55 per barrel.
Export impact expected from April
Industry sources said the impact of the government’s communication will likely begin to show from April onwards, as most export cargoes scheduled for March have already been fixed and are difficult to recall.
For March, combined exports of gasoline, diesel and jet fuel are still expected to remain broadly in line with earlier projections of around 3.8 million metric tons, as companies move to capitalise on strong regional margins.
Ship-tracking data from LSEG shows that so far this month, China has already exported about 70,000 tons of jet fuel, 35,000 tons of diesel and 35,000 tons of gasoline.
Three regional buyers of Chinese fuel cargoes told Reuters they expect to receive their March shipments in accordance with previously agreed loading schedules.
Refineries begin cutting output
China regulates refined fuel exports through a quota system, designed to balance domestic supply and overseas sales.
The government’s first batch of export quotas for 2026 was set at 19 million tons, little changed from the previous year.
Meanwhile, some Chinese refineries have already started reducing production as crude supply disruptions linked to the Middle East conflict push oil prices higher.
Privately run Zhejiang Petrochemical Corp and Sinopec’s Fujian refinery have both begun trimming throughput this month, according to sources.
Industry insiders expect more refineries to scale back operations if crude oil supply disruptions from the Middle East persist and global prices continue to surge.
(With inputs from Reuters)