This may ease tight supplies after regional refiners cut output due to crude shortages from the Iran war
Published Thu, Jun 25, 2026 · 02:44 PM
CHINA will raise the amount of refined fuel its state-owned refiners are allowed to export in July from June, three industry sources briefed on the plan said.
China is one of Asia’s largest fuel exporters and the higher allowance would ease tight supplies, as regional refiners curtailed output because of crude shortages from the US-Israeli war with Iran.
Beijing had cut its exports since March after the war started to ensure sufficient domestic fuel supplies. The controls capped exports to destinations outside Hong Kong and Macau at 400,000 to 500,000 tons in April and May, customs data showed.
At a meeting between government officials and Chinese state refiners this week, Beijing set a fuel export allowance of 800,000 metric tons for July, said the three sources. That is up from estimates of about 600,000 tons of exports for this month.
There will be no restriction on export destinations, two of the three sources said. Reuters reported the increase in July export allowances and the removal of destination restrictions for the first time.
One of the sources said most of these volumes are allocated for diesel and jet fuel. Exports to Hong Kong and Macau are currently pegged at 900,000 tons or more, similar to June, the source added.
China’s Ministry of Commerce and National Development and Reform Commission did not immediately respond to requests for comment via fax.
Even with the increase, the planned volume for July would be less than 40 per cent of last year’s monthly average for exports outside of Hong Kong.
The decision comes after crude shipments to the world’s top importer plummeted in May as Chinese refiners, mired in losses from weak domestic sales, drew on crude reserves and cut output.
The curbs have been enacted in addition to China’s typical quotas on fuel exports. Earlier this month, Beijing set its second batch of quotas flat versus a year ago at 18 million tons. Export margins for gasoline and diesel for Chinese refiners have stayed unchanged for the past two weeks at 1,000 yuan (S$190.99) per ton and 900 to 1,000 yuan per ton, respectively, said two other trade sources.
Higher fuel exports from China will likely add to the rising regional supplies from northeast Asian refiners since last month and weigh on some product prices.
Benchmark diesel and jet fuel cash premiums and monthly price spreads have already eased back to pre-war levels amid increasing supplies. REUTERS
