China may supply gasoline to Russia if import duties drop, tightening regional supply

China is more likely than other Asian producers to supply gasoline to Russia if Moscow cancels specific import duties on the product, a move that could tighten regional supply, according to analysts and Asian traders on Oct. 3.

Russia is considering eliminating some gasoline import duties and permitting the use of cheaper octane-boosting additives to address supply shortages in the country, Kommersant reported Oct. 1, citing recommendations by Deputy Prime Minister Alexander Novak. The shortages were initially caused by low inventories at independent tank farms following slower spring demand, and later exacerbated by a series of Ukrainian drone attacks targeting refineries.

The measures include canceling the 5% duty on gasoline imports from China, South Korea and Singapore, and increasing imports from Belarus.

A Beijing-based expert on China-Russia energy said Russia would only consider importing gasoline from the Far East, as oil tankers in the Black Sea are vulnerable to Ukrainian drone attacks.

He added that while barrels can be transported to western Russia by train, freight costs remain high due to the long distance and ongoing drone threats.

"It will be very difficult to make money [from gasoline outflows], as Russia's domestic gasoline prices are low and freight costs [for land transportation by train] are extremely high," he said.

China-Russia trade

Given the close trade relationship between China and Russia, Chinese companies would find it easier to manage supplies to Russia and receive payments through China-based banks if Russia cancels the gasoline import duties, according to a Singapore-based banker.

According to Chinese customs data, the value of Chinese goods exported to Russia totaled $64.77 billion in the first eight months of 2025, marking a 9.7% decrease compared with the same period in 2024, amid tightening sanctions on Russia.

However, China remains the leading importer of Russian crude oil via both seaborne routes and pipelines, despite volumes declining by 8.2% year over year to 1.98 million b/d during January-August, according to the customs data.

China has not exported gasoline to Russia for at least a decade, the data showed, as Russia remained self-sufficient in meeting its domestic demand.

Singapore, S Korea on sidelines

Due to financial restrictions amid international sanctions and regulatory measures, companies in Singapore and South Korea have preferred to remain on the sidelines and avoid participating in supplying gasoline to Russia.

"Banks would not process the payments," a Singapore-based gasoline trader with an Asian firm said, adding that the company will not consider the supply.

South Korean refiners have avoided Russian energy since the second half of 2019, choosing to steer clear of trade, logistical, legal and financial complications in order to uphold their strong corporate reputation, according to refinery sources.

Another Singapore-based banker said it is risky for a Singaporean bank to facilitate payments from Russia to Singapore-registered companies, as the process requires extensive document checks for compliance.

"It will be extremely time-consuming. Even with all this detailed work, banks still cannot guarantee they will be able to accept payments from Russia. As a result, banks are reluctant to take on this business," the banker said.

Current international sanctions and restrictions mainly target Russian oil and refined product exports to other countries, as well as vessels and companies involved in transporting Russian crude and products outside of Russia—particularly to destinations that violate EU or US policies.

There are no signs that supplying gasoline directly to Russia would trigger sanctions; however, "there is a risk that the Russian importer and/or the financial institution may be included on the sanctions lists," the banker said.

Asian gasoline supply

Analysts with Energy Aspects said in an October note that increased Asia-to-Russia gasoline flows would support east of Suez cracks and widen the east-west spread, further boosting demand from East Africa and the Middle East for Atlantic basin barrels.

"If Russia fights for the export share from China, I guess gasoline supply in the Straits would be tight," another Singapore-based gasoline trader said.

Traders and market analysts attributed the potential tightening of supply to China's difficulty in increasing exports to meet Russia's demand, due to Beijing's control over clean oil product exports through quotas.

Market participants do not expect China to issue additional export quotas in 2025, effectively capping outflows at the quota volume of approximately 40.77 million metric tons for the year.

China likely exported about 600,000 mt (170,000 b/d) of gasoline in September, and October's volume could range between 560,000 mt and 600,000 mt, according to estimates from market sources.

If Russia cancels the duties on gasoline imports, Novak says this could lead to additional monthly domestic deliveries of at least 350,000 mt of gasoline and 100,000 mt of diesel.

Platts, part of S&P Global Energy, assessed the 92 RON gasoline FOB Singapore-Dubai crack at an average of $9/b in September, strengthening from $8.17/b in August.