By Chen Aizhu and Trixie Yap
SINGAPORE, Oct 9 (Reuters) – China is set to resume October refined fuel exports after a brief halt during its Golden Week holiday, a move that will help ease tight global diesel, gasoline and jet fuel markets, four traders familiar with the matter said on Friday.
China has approved October exports of the three fuels at around 3.7 million metric tons combined, according to two other industry participants.
Chinese refiners were expected to export slightly more than 4 million tons of gasoline, diesel and jet fuel in September, Reuters reported early last month.
The world’s biggest oil importer began curbing fuel exports in March to safeguard domestic fuel supplies as the US-Israeli war on Iran disrupted crude oil flows and refinery production, but relaxed controls between July and September.
China’s National Development and Reform Commission and the Ministry of Commerce did not immediately respond to requests for comment.
The Middle East war and the Ukraine-Russia conflict have disrupted refined fuel output globally and caused prices to rise, particularly for diesel fuel.
China has the world’s largest refining capacity, and though its fuel export volumes have typically lagged behind India and South Korea among Asian processors, its refined products are sought after because of the disruptions, particularly in Asia.
However, market analysts said China’s move would only modestly ease the fuel market tightness.
“It will be limited as markets remain tight overall and Middle Eastern supplies are still disrupted,” said Stuti Jhunjhunwala, an oil market analyst at Energy Aspects based in Kolkata, India.
June Goh, senior analyst at Sparta Commodities, said Beijing’s resumption of exports was expected but the volumes were lower than anticipated.
HOLIDAY BREAK
While Beijing typically regulates fuel exports through a quota system, it has recently tightened oversight by vetting shipments on a month-by-month basis.
However, China started its week-long National Day holiday on October 1 without giving major refiners in the world’s largest refining hub a green light to export fuel products to regions other than Hong Kong and Macau in October, Reuters reported last week.
Amid the refined fuel tightness, this week the International Energy Agency, which advises industrialised countries on energy policy, agreed to accelerate the release of oil stocks and prioritise diesel supplies under a plan launched in March.
(Reporting by Chen Aizhu and Trixie Yap; Additional reporting by Sam Li in Beijing, Mohi Narayan in New Delhi, and Jeslyn Lerh in Singapore; Editing by Muralikumar Anantharaman, Tony Munroe, Shri Navaratnam and Christian Schmollinger)
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