China Suspends Oil Product Exports, Impact on Global Markets

Chinese oil refineries have suspended oil product exports in October to preserve domestic supplies. This decision may exacerbate the situation in fuel markets, which are already suffering due to the war in Iran. Beijing has restricted fuel exports since March following the onset of the conflict, which disrupted crude oil supplies from the Middle East. Although restrictions were eased in July, major refineries have not received permission to export, except for supplies to Hong Kong and Macau. It is unclear whether Beijing will resume exports after the holidays on October 7, as this depends on domestic stocks and processing volumes. Global markets are facing supply losses due to the war in Iran and attacks on Russian refining infrastructure, which could lead to price increases in some countries. Commercial gasoil and diesel stocks in China are approximately 20 million barrels below pre-war levels, while gasoline is short by 9 million barrels. Beijing has made exports contingent on the recovery of local stocks. Chinese refinery Sinopec has increased purchases of Russian oil from the Far East due to reduced supplies from the Middle East.

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