China urges refiners to suspend fuel exports amid Middle East conflict, sources say

Lower exports from China, one of Asia’s biggest fuel exporters, likely to worsen tight supply situation in the region. Read more at straitstimes.com.

SINGAPORE - China has asked companies to suspend signing new contracts to export refined fuel, and to try and cancel shipments already committed, as a widening Middle East conflict curbed refinery output, several industry and trade sources with knowledge of the matter said on March 5.

The call does not apply to jet fuel refuelling for international flights, bonded bunkering or supplies to Hong Kong or Macau, the people said.

The National Development and Reform Commission did not immediately respond to a request for comment.

Lower exports from China, one of Asia’s biggest fuel exporters, are likely to exacerbate the tight fuel supply situation in Asia, pushing refining margins even higher.

Diesel’s processing margins were hovering at three-year highs near US$49 a barrel, LSEG pricing data showed on March 5, while jet fuel cracks were more than US$55 a barrel.

As most of the March export programme has been fixed and it is hard to recall cargoes, the new government communication is expected to cut into exports from April onwards, the sources added.