China to keep clean oil product export curbs in July; policy may shift in Aug

China is expected to keep exports of clean oil products tightly restricted in July, although market participants are closely watching developments around the reopening of the Strait of Hormuz and progress in US-Iran talks to see if it would prompt Beijing to consider easing controls later in July or August, multiple local refinery sources told Platts.

Two Sinopec refinery sources in southern China said there has been no change in the country's oil product export policy for the time being.

"But with the Strait of Hormuz reopening soon, it is time to watch when China will loosen restrictions on oil product exports," one of the Sinopec refinery sources said.

A source at a state-owned refinery in northeastern China also said export restrictions remained unchanged. The source said only around 40,000 mt of jet fuel was scheduled to be shipped to Hong Kong in July, down from 50,000 mt in June.

A third source with a state-run refinery said the key market focus was whether policy would be adjusted in July or August following the latest round of US-Iran talks.

Beijing restricted exports of clean oil products in mid-March due to the war in the Middle East, only to relax them slightly in early April. The controls were further relaxed in May, allowing about 500,000 mt of clean oil products to be exported to 13 friendly foreign countries, including Vietnam, Cambodia, Laos, Australia, Bangladesh, the Maldives, and Myanmar, Platts, part of S&P Global Energy, reported on April 29.

Due to the restrictions, China's total gasoline, gasoil, and jet fuel exports dropped 24.3% year over year to 10.45 million mt in the first five months, data from the General Administration of Customs showed.

Meanwhile, Beijing released in early June 13 million mt of export quotas for clean oil products in the second batch, bringing the total allocation for 2026 to 32 million mt, up 0.6% year over year, Platts reported on June 10.

The exports over January-May and the new allocation suggest that China's clean oil products exports may see a strong increase in the second half of 2026 if quota holders are required to use up their allowances to secure the volume in 2027, two Singapore-based trade sources said.

Gasoil exports to Australia, SE Asia

China resumed gasoil exports to Australia in May after suspending shipments in March and April, sending 10,000 mt to the country during the month, GAC data showed.

Beyond gasoil, China also exported 79,000 mt of jet fuel to Australia in May, according to the data. About 969,000 barrels of jet fuel were also exported to Australia for delivery in June, Platts reported on June 11.

Other countries that receive China's gasoil exports are in Southeast Asia, including Bangladesh, Myanmar, Sri Lanka, Cambodia, and Laos, GAC data showed.

Hong Kong remained the key outlet for China's gasoil supplies, receiving 130,000 mt in May, up 12.9% month over month, according to GAC.

China exported 311,000 mt of gasoil in May under HS code 27101926, while another 44,000 mt was exported as biodiesel under HS code 27101925, customs data showed.

For biodiesel, China exported a combined 215,000 mt in the first five months of the year, GAC data showed. Around 90% of the total, or 193,000 mt, was shipped to the Netherlands and Belgium, with the Netherlands accounting for 51% and Belgium 39%, according to the data.

Myanmar receives gasoline

China's gasoline exports remained low in May, similar to April levels, with total shipments at 33,000 mt, up 43.5% from 23,000 mt in April, General Administration of Customs data showed. Of the May total, 20,100 mt was shipped to Hong Kong and 4,400 mt to Macao.

Myanmar was the only overseas country to receive Chinese gasoline in May, taking 8,400 mt, the data showed.

On June 23, three local information providers reported that 21 independent refineries in eastern Shandong province are expected to supply 82,000 mt of gasolineand gasoil in late June to early July to China's state-owned oil majors for export.

None of the independent refiners confirmed the move to Platts.