China Restarts Fuel Exports
China has decided to restart exports of fuels, after a one-week suspension. This should bring some relief to fuel markets, and especially diesel markets, where prices are running at record highs, not least because of the fuel export suspension news out of China last week. The information comes from unnamed trading sources who spoke to Reuters, and who also told the publication Beijing has…
China has resumed fuel exports after a one-week suspension, potentially easing pressure on fuel markets, particularly diesel markets which have seen record-high prices due to the suspension news. Unnamed trading sources told Reuters that Beijing has approved total fuel exports for October at 3.7 million metric tons, encompassing gasoline, diesel, and jet fuel.
The decision came following a sharp decline in China's fuel stockpiles, with Kpler estimating commercial diesel and gasoil inventories to be around 20 million barrels below pre-war levels, and gasoline stocks 9 million barrels short of Beijing's desired threshold for normalizing exports. The temporary halt in exports was seen as a market signal of China's uncertainty about the safety of Middle East crude flows from the Strait of Hormuz, as well as strong fuel export growth during the summer months.
While the suspension is expected to provide some relief to diesel price pressures, the impact may be short-lived given the global diesel supply imbalance.
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