Full Breakdown
China Suspends Fuel Exports Beyond Hong Kong, Tightening Asian Supplies
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Core Event: Export Suspension and Immediate Market Impact
On October 2, China announced a suspension of oil-product exports to all regions except Hong Kong and Macau. The move targets some of its largest overseas buyers, notably Singapore, Malaysia and Australia. Asian refiners responded with a surge in gasoline margins, which rose to more than $50 a barrel over Brent crude, while spreads for gasoil and jet fuel shifted into steeper backwardation, indicating higher short-term prices than future contracts.
Data & Statistics: Export Volumes and Price Movements
Analytics firm Kpler reported that Singapore imported 1.772 million metric tons (14.97 million barrels) of Chinese gasoline in the first nine months of the year, a volume 62 % lower than the total imported in the previous year, underscoring tighter supply. Jet fuel, primarily exported to Hong Kong, now commands a premium of roughly $2 a barrel over diesel—a level not seen since mid-July, according to LSEG data. Diesel margins fell to about $67 a barrel, a three-session low, after European gasoil futures slipped on expectations of additional supplies.
Official Statements & Responses
Muhammad Baron, spokesperson for Indonesian state energy firm Pertamina, said the company is closely monitoring China’s “dynamic” fuel export policies and is diversifying its supply portfolio while boosting domestic production and biofuel development. The Australian government noted that the nation holds 42 days of petrol and 29 days of jet fuel at normal levels, with 45 ships en route and 3.5 billion litres locked in for delivery over the next four weeks. A source familiar with EU discussions said European Union ministers debated a French proposal to release extra diesel stockpiles in response to U.S. pressure for greater supplies. James Noel-Beswick, head of commodities at Sparta, observed that the recent strength in Asian jet-fuel prices has eliminated the arbitrage window that previously allowed Asian exporters to ship jet fuel to Europe.
Verbatim Quote
“We continue to closely monitor developments in China's fuel export policies, which remain dynamic,” — Muhammad Baron, a spokesperson at Indonesian state energy firm Pertamina — Muhammad Baron, spokesperson, Pertamina