BEIJING: China’s move to halt fuel exports could squeeze diesel supplies in parts of Asia, although increased production elsewhere in the region should help cushion the impact, say analysts.
Reuters reported on Oct 1 that Chinese refiners had suspended oil product exports for the month, citing sources. China has not made an official announcement.
The pause reflects concerns over domestic supplies amid heightened uncertainty around global energy flows disrupted by the Iran war, observers say.
It also comes as pump prices hit record-high levels in the United States and parts of Europe, with governments weighing measures to keep supplies flowing while reining in costs.
Analysts add that the effects could also ripple beyond Asia as buyers seek replacement barrels, potentially tightening supplies in markets further afield.
“In the wider context of global diesel shortages, China’s diesel export suspension is a blow to the Atlantic Basin balances,” June Goh, a senior oil market analyst at oil-market analytics firm Sparta Commodities, told CNA, referring to diesel supply and demand in markets around the Atlantic Ocean.
DOMESTIC PRIORITIES
China began its week-long Golden Week holiday without giving major refiners the green light to export fuel products to regions other than Hong Kong and Macau in October, according to the Reuters report.
Beijing relaxed fuel export curbs in July after tightening them in March following the outbreak of the Iran war. The country currently manages diesel, gasoline and jet fuel shipments monthly.
At the heart of Beijing’s latest decision is a familiar priority – ensuring adequate fuel supplies at home.