China Freezes Fuel Exports to Shore Up Domestic Reserves

PetroChina has scrapped multiple cargo shipments, while Zhejiang Petrochemical opted to schedule no exports during the week-long National Day holiday. Although officials may authorize shipments after October 7, the pivot reflects a desperate attempt to stabilize internal stocks. Kpler data indicates that diesel and gasoil inventories currently sit 20 million barrels below pre-war levels, with gasoline reserves trailing Beijing’s target threshold by 9 million barrels.

The reversal marks a sharp departure from the summer, when China ramped up exports to 6.01 million tonnes in August—a six-month high. This withdrawal intensifies pressure on an international market already strained by Middle Eastern logistics disruptions and drone strikes on Russian refinery infrastructure. With Asian fuel markets operating with minimal surplus, the loss of Chinese supply leaves global buyers scrambling for barrels in an increasingly competitive landscape where even minor U.S. export restrictions could trigger significant price spikes.