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Emma Ma

While Beijing has lifted refined fuel export restrictions this month amid elevated global oil prices and ample national reserves, it has also introduced compliance requirements for refiners – a cautious pivot aimed at safeguarding domestic stockpiles, according to three sources with knowledge of the matter.
“With the interim truce between Washington and Tehran having collapsed, Beijing has adopted a more cautious stance on easing curbs for fuel exports,” a person familiar with the matter said in an interview, speaking on the condition of anonymity.
“Refiners now face dual requirements: they can only ship fuels under allocated quotas, while keeping their inventory levels above the end-February mark. Domestic consumption security remains the top priority.”
The latest export quotas – covering refined products including petrol, diesel and jet fuel – were allocated mostly to state-owned domestic refiners, the sources said.
The curbs on fuel exports were first introduced in March following the outbreak of the US-Israeli war on Iran, though Beijing did not formally acknowledge the restrictions. Fu Chengyu, former chairman of China National Offshore Oil Corporation and Sinopec, the country’s two leading state oil giants, outlined details of the policy in an article published on July 14.
“Since the second quarter of 2026, China’s National Development and Reform Commission and Ministry of Commerce have tightened refined oil export supervision,” Fu wrote in Energy Intelligence, an independent energy news and data provider.
“Starting in May, the government adopted vessel-by-vessel approval and stringent export quota controls for oil products.”
The policy, he stated, was crafted with a clear objective: to “avoid domestic crude resource outflows and imported global inflation under elevated oil prices”.
Under these restrictions, China shipped 23.6 million tonnes of fuel in the first six months of the year, marking a 13.2 per cent year-on-year decline, official data showed. April recorded the steepest annual drop, at nearly 38 per cent, with shipments also subdued through May and June.


After four months of fuel export controls, market observers characterised the move to ease restrictions as a timely intervention. “Regulators were confident that domestic demand could be fully satisfied without supply shortages,” said an analyst who declined to be named because of the sensitivity of the issue.
“Sustained production and suppressed exports over several months have left inventory levels at domestic refining facilities elevated.”
Meanwhile, Fu noted that “existing crude reserves were released in an orderly manner to guarantee domestic refining supply. Port storage capacity was also close to saturation, restricting crude oil berthing and unloading.”
China aggressively expanded its crude oil stockpiles in 2025, when oil prices recorded their biggest annual loss since the pandemic. Data from the US Energy Information Administration showed Beijing held the world’s largest crude reserves at nearly 1.4 billion barrels in December – more than triple the US inventory.
“With global crude benchmarks trading at high levels, refined fuel exports would deliver hefty profits for domestic refiners at this juncture,” the analyst said.
Tensions between the US and Iran escalated over the weekend. Iranian state media reported on Sunday that US missiles had hit the outskirts of Abadan, a critical oil hub in southwestern Iran that houses multiple refining facilities. Iranian authorities confirmed the attack.
The renewed fighting pushed the global crude benchmark Brent to above US$90 a barrel on Monday. Zhao Xuyi, an analyst at Guotai Haitong Futures, noted that the price rally was being fuelled solely by geopolitical developments, adding that his firm expected those risks to remain entrenched “for quite some time”.
“With global demand posting marginal improvement, our calculations showed that based on global supply and demand fundamentals, oil’s fair value had risen to US$75 a barrel,” Zhao added.
Still, fuel exports remained “unlikely to rebound immediately,” according to a research report published last week by Emma Li, lead China oil analyst at London-based consultancy Vortexa.
Refiners needed time to lock in cargo allocations and arrange shipments, Li said, noting that Beijing’s mandate of “maintaining product inventories” at high levels meant they could not simply drain inventories to ramp up overseas sales.


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Tight mandates remain in place to protect domestic energy security amid a resurgence of war in the Middle East


Tight mandates remain in place to protect domestic energy security amid a resurgence of war in the Middle East.


As Iran war drags on, China keeps tight grip on fuel exports despite eased curbs

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Tight mandates remain in place to protect domestic energy security amid a resurgence of war in the Middle East

Tight mandates remain in place to protect domestic energy security amid a resurgence of war in the Middle East