Shrinking China fuel stockpiles raise chance of export curbs
Published Wed, Sep 16, 2026 · 12:01 PM
CHINA’S petrol and diesel inventories are plunging as refiners grapple with a tightening domestic market, raising the chance the government may move to limit fuel exports again.
Petrol stockpiles at Chinese state-owned fuel suppliers dropped 2.9 per cent last week to the lowest since 2022, according to JLC International. Diesel holdings declined 2.4 per cent to a 15-month low.
Chinese traders are already seeing fewer domestic offers for diesel as market participants try to manage inventories, and think about withholding supplies for later sales.
Beijing moved quickly to curb oil product exports in the early weeks of the US-Iran war, depriving Asian buyers of much-needed fuel but also helping to keep a lid on global crude prices.
Authorities subsequently eased the restrictions, and shipments of petrol, diesel and jet fuel, known as clean products, had recovered to a combined 2.55 million tons in July, according to the latest Chinese customs data.
“With the domestic market tightening, we see an increasing risk that Beijing could restrict monthly clean product exports to around 1.2 million tons in the fourth quarter,” said Jianan Sun, an analyst at Energy Aspects in London.
China’s government strictly controls the amount of fuel refiners can export, and they were only allowed to resume and increase shipments on the condition that they keep inventories at elevated levels.
With some oil is getting through the Strait of Hormuz, volumes are still well below pre-war levels. And the recent closure of Saudi Arabia’s East-West pipeline and Houthi territorial gains in Yemen are threatening shipments via the Red Sea.
Chinese independent refiners, meanwhile, have lost access to their favoured Iranian crude due to the US blockade.
That’s pushing up premiums for oil from Africa and Latin America, as Chinese buyers scramble to source alternative barrels.
The situation is becoming so dire for the independents, or teapots, that they may have to cut run rates in the coming weeks.
JLC, a Chinese industry consultant, collects data directly from oil majors’ provincial marketing companies across the nation. The government doesn’t release official inventory figures.
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