China’s fuel export ban deepens challenges

China’s ban on exports of diesel, gasoline and jet fuel is poised to exacerbate fuel shortages and further boost prices for Asian industry and transportation buyers already grappling with tightening supplies caused by the US-Israeli war against Iran, reported Reuters.

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Even before the ban, Asian refiners were scrambling to secure alternative crude shipments while several refineries in the Gulf, many of which ship fuel to Asia, have shut since the war halted shipping via the critical Strait of Hormuz route. China, the world’s top oil importer, last week banned fuel exports until at least the end of March, in an attempt to preempt domestic shortages, sources said, curbing exports that last year totalled $22 billion.

Australia, Bangladesh and the Philippines are especially reliant on Chinese fuel supply and will have to cover their needs elsewhere.

China is Asia's No. 4 exporter of so-called clean fuels after South Korea, India and Singapore, apprised Reuters. It is also home to the world’s largest refining sector and is known as a swing supplier, with exports picking up when local demand dips and export margins are attractive. Beijing has long limited China's fuel exports with quotas, but an outright ban poses a new challenge and climbing prices already reflect that.