China Restarts Fuel Exports With 3.7M Ton October Quota

China has decided to resume fuel exports following a one-week suspension, according to trading sources cited by Reuters. The move is expected to bring relief to global fuel markets, particularly diesel, where prices have reached record highs due to tight supply and the recent export halt.

October Export Quotas

Beijing has approved a total of 3.7 million metric tons of fuel exports for October. This allocation includes gasoline, diesel, and jet fuel. The resumption follows a brief suspension that began on October 1, when state-owned oil majors reportedly canceled scheduled export cargoes to protect domestic supply.

Domestic Inventory Pressures

The temporary export halt was triggered by a sharp decline in China's domestic fuel inventories. Data from Kpler indicated that commercial diesel and gasoil inventories were approximately 20 million barrels below pre-war levels. Additionally, gasoline stocks fell roughly 9 million barrels short of the threshold Beijing requires before normalizing exports.

Market Implications

Prior to the suspension, China's fuel exports had grown significantly over the summer. Official customs data showed total oil-product exports reached 6.01 million tonnes in August, representing a 12.7% year-on-year increase and the highest level since March 2024. June Goh, a senior oil analyst at Sparta Commodities, noted that the suspension of product export quotas signaled market uncertainty regarding the security of Middle East crude flows through the Strait of Hormuz.

Key facts

• China approved 3.7 million metric tons of fuel exports for October.
• The resumption follows a one-week export suspension initiated on October 1.
• Kpler estimates commercial diesel and gasoil inventories are 20 million barrels below pre-war levels.
• August oil-product exports reached 6.01 million tonnes, up 12.7% year-on-year.