China's shrinking gasoil exports mitigate impact of EU ban on products refined from Russian crude

China's diminishing gasoil exports, along with efforts by refineries to reduce gasoil production, indicate that an EU ban on oil products refined from Russian crude oil, set to come into effect next year, is unlikely to have a significant impact on China's gasoil trade flows, market sources said July 23.

The 18th Russia sanctions package announced by the EU on July 18 has prompted analysts to predict that about 250,000 b/d of diesel from two main Russian crude importers, Turkey and India, would be diverted from Europe and the Atlantic Basin to Asia.

China was the world's top importer of Russian crude in the first half of 2025, despite the volume dropping by 10.9% year over year to 1.99 million b/d, according to data from China's General Administration of Customs.

However, Beijing discourages oil product exports by increasing taxes on outflows and imposing strict export quota controls, despite ongoing refining capacity expansions.

Chinese refineries have also been reducing the gasoil production yield, leading to a 284,000 b/d (or 7.2%) year-over-year drop in output to 3.94 million b/d, data from the National Bureau of Statistics showed.

The effective production cut enabled Chinese refineries to slash their gasoil exports in the first half of the year by 46.5% year over year to 115,920 b/d (2.82 million mt), according to GAC data.

Exports to Europe in the first half posted a sharper year-over-year reduction of 57% to about 8,380 b/d, accounting for about 7.2% of Chinese gasoil outflows, with the Netherlands and Belgium the top destinations.

"It is not a big deal for China to turn off the stream to Europe," a Beijing-based analyst said.

About 81.6% or 95,000 b/d of H1 gasoil exports were shipped to destinations in Asia.

"We still have about six months to find a solution. Even if access to Europe is blocked, we may also explore Africa and Latin America besides Asia," an analyst with an Indian refiner said.

No gasoline to Europe

China hasn't exported any gasoline to Europe so far this year, with Asia also the top destination.

Southeast Asian countries imported a combined 3.55 million mt of gasoline in the first half of 2025, accounting for 91% of the total.

This is up from 88% in H1 2024, the GAC data showed.

Singapore remained the leading destination for Chinese gasoline among Southeast Asian countries, taking 72.3% of the total in the first half of the year, largely stable year over year, according to the data.

Malaysia increased its gasoline imports from China over January-June, taking 371,000 mt, up 8.5% year over year, GAC data showed.

Top destinations for China's gasoline exports ('000 mt)

Top destinations for China's gasoil exports ('000 mt)

Source: General Administration of Customs

Notes: *including exports to other outlets