What happened
China has suspended fuel exports, just a week after President Donald Trump asked Chinese President Xi Jinping to increase production of refined petroleum products to stabilize global supply. The country's refiners have stopped exporting fuel outside of Hong Kong and Macau for the month of October.
According to sources, state-owned PetroChina canceled several gasoline and jet fuel shipments that were planned for October. This move is expected to drive fuel prices in some countries to new highs, as global markets are already struggling with supplies lost due to the Iran war and Ukraine's attacks on Russian refineries.
The suspension of fuel exports may be temporary, as China has restricted exports before and then rolled back the controls when it served their interests. The country's decision to suspend exports is likely due to domestic fuel inventories and refinery output, which are currently below pre-war levels.
The US Energy Information Administration has forecast that US inventories of distillate fuel, often sold as diesel, will remain below their lowest level of the previous five years through the end of 2026 and most of 2027. This, combined with China's suspension of fuel exports, may push up heating oil prices for homes in the Northeast and further tighten supplies, leading to higher prices.
