APPEC: China yet to restrict refined oil product export despite tight domestic supply

The Chinese government has not yet restricted clean oil products -- gasoline, gasoil, and jet fuel -- exports, despite domestic supplies becoming tighter, two senior officials at the country's top refiners told Platts, part of S&P Global Energy, on the sidelines of APPEC Sept. 8.

China's oil product exports, including clean oil products and fuel oil, rose 12.7% year over year to 6.01 million metric tons in August, the highest since March 2024, when the volume reached 6.02 million mt, data from the General Administration of Customs showed Sept. 8.

Market sources previously estimated clean oil product exports at about 3.68 million mt in August, and said they would exceed 4 million mt in September despite both gasoline and gasoil stocks reaching an over-three-year low as of Sept. 4, Platts reported earlier.

Meanwhile, as Iranian crude supplies slump, China's feedstock supplies are set to be tight, capping oil product output in the coming months, a senior official with a state-run refiner told Platts.

The tightness has emerged despite the country's crude imports recovering further in August, the official said. China's crude imports reached a four-month high of 8.97 million b/d (37.93 million mt) in August, GAC data showed.

The Chinese government required refiners to prioritize meeting domestic demand rather than economic considerations. It temporarily suspended clean oil product exports in mid-March, when the war in the Middle East began, before fully lifting the restrictions in July, Platts reported earlier.

"Beijing does not have further instructions on clean oil product exports yet," the senior official said, adding that it could happen anytime, "Just a phone call."

"Oil companies would love to take the chance to secure the high export margins, but this could be subject to quick changes from the government side due to the low availability of crude," an analyst with an exporting company said on the sidelines of APPEC.

"The biggest uncertainty is whether China will continue to export oil products with volumes at levels similar to those of September," said a senior executive with an exporting refiner.

"We have exported clean oil products to the overseas market within the quota limits, but there seems to be no impact on the market after those volumes were sent to the overseas market and absorbed, indicating that the supply was still quite tight in the international market," the senior executive added.

The export margin is quite high, so it's reasonable for refineries to export and capture the profit at this moment, he added.

APPEC delegates estimated the export margin for gasoil stood at $20-$30/b for Chinese refiners.

Platts, part of S&P Global Energy, assessed the second-month Singapore gasoil swap crack against Dubai crude swaps at $71.61/barrel Aug. 19, marking a record-high margin for the middle distillate product.

The crack spread has averaged $67.86/b so far in September, compared to the August average of $64.71/b, the July average of $56.14/b, and the 2025 average of $18.16/b.