China’s diesel fuel and gasoline inventories are declining, which may eventually lead to the imposition of export curbs, Bloomberg has reported, citing recent fuel inventory data.
Gasoline inventories at state-owned energy majors were down by 2.9% last week to their lowest level since 2022, according to Chinese commodity market research firm JLC International. Diesel inventories are sitting at the lowest in 15 months, booking a 2.4% dip last week, the publication noted.
“With the domestic market tightening, we see an increasing risk that Beijing could restrict monthly clean product exports to around 1.2 million tons in the fourth quarter,” Energy Aspects analyst Jiana Sun told Bloomberg.
China already imposed export curbs on fuel producers in the spring, when the U.S. and Israeli war on Iran sparked doubts about the security of fuel supply in the world’s largest crude oil importer, which is also a major fuel exporter.
In early 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. The ban on exports took immediate effect, covering all gasoline, diesel, and jet fuel cargoes that had not cleared customs as of March 11. As a result, gasoline and diesel stocks at state refiners reached their highest levels since 2025 and 2024, respectively.
China relaxed the export restrictions a month later, with exports in June surging amid a supply shortfall from the Middle East, as refineries suffered damage from drone and missile strikes. The gradual relaxation has continued since then, prompting significant growth in exports, especially in fuel oil, which hit a 2026 high in June.
If China moves to limit fuel exports now to protect its domestic market, this would add insult to injury in a global market already facing diesel shortages that cannot be resolved by simply diversifying suppliers because there are no suppliers to diversify with—and demand is on a seasonal climb.
By Irina Slav for Oilprice.com
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