China orders top refiners to halt diesel, petrol exports
China has told major refiners to pause diesel and petrol exports, prioritising domestic supply as Middle East disruptions hit crude shipments
Chinese authorities have announced that the country’s largest oil refiners must stop exporting diesel and petrol after the Iran war severed a key artery of China’s energy supply.
Bloomberg reported today (March 5) that Chinese authorities have ordered the country’s largest refiners to suspend exports of diesel and petrol after the escalating conflict in the Persian Gulf began affecting shipments of crude oil from one of the world’s major producing regions.
Citing sources familiar with the matter, the report said the National Development and Reform Commission (NDRC) — China’s main economic planning agency — met executives from several refining companies and verbally instructed them to “suspend exports” of oil products temporarily, effective immediately.
The sources said refiners were asked to stop signing new export contracts and to negotiate the cancellation of deliveries that had already been agreed. However, there were exceptions for aviation fuel and bunker fuel stored in bonded warehouses, as well as for deliveries to Hong Kong and Macau.
Refineries in China that regularly receive government fuel export quotas include PetroChina, Sinopec, CNOOC, Sinochem Group and private refiner Zhejiang Petrochemical. None of the five responded to Bloomberg’s questions.
China has a large refining sector, but most output is used to meet domestic consumption, meaning China is not a major exporter for the region. Counting only seaborne exports, China ranks third in Asia, behind South Korea and Singapore.
However, Beijing’s move to restrict exports reflects China’s ongoing dependence on energy imports from the Middle East. China is prioritising domestic energy demand amid an intensifying crisis in the Middle East.
After almost no oil or fuel has been exported from the Persian Gulf since US and Israeli attacks began over the past weekend, refineries in several countries — from Japan and Indonesia to India — have started cutting refining runs and suspending exports as well.
Although China has tried to diversify oil and gas import sources in recent years, it still imports nearly half of its oil from the Gulf region and remains the buyer of almost all oil from Iran.
