China and Russia halt fuel exports, tightening global diesel supply

China has suspended most refined fuel exports for October, including gasoline, diesel, and jet fuel, to prioritize domestic supply security. Beijing has not yet provided a date for when these exports might resume, though shipments may continue to Hong Kong and Macau. PetroChina has reportedly cancelled several scheduled cargoes for the month, and Zhejiang Petrochemical did not schedule exports during the National Day holiday.

This move follows a deterioration in China’s domestic fuel stocks. Kpler estimates commercial diesel and gasoil inventories are approximately 20 million barrels below pre-war levels, while gasoline stocks remain below the threshold required by Beijing. This follows a period during the summer when China had significantly increased its exports to help fill gaps in the global market.

The reduction in Chinese supply coincides with a diesel export ban from Russia, which has been extended through October 31. These restrictions, combined with disruptions in the Middle East and Ukrainian drone strikes on Russian refineries, are tightening the global fuel market. The shortage poses risks to international markets, including the U.S. East Coast, and could impact transportation and heating supplies as winter approaches.