China instructs major oil refineries to halt fuel exports amid Persian Gulf supply concerns

China’s government has instructed the country’s largest oil refiners to halt exports of diesel and petrol as an escalating conflict in the Persian Gulf disrupts the supply of crude from one of the world’s largest producing regions, according to a report by Bloomberg.

Officials from the National Development and Reform Commission, the country’s leading economic planner, met with refinery executives and verbally requested a temporary halt in refined product shipments, which would begin immediately, the report said, citing people familiar with the matter.

The refiners were instructed to stop signing new contracts and to negotiate the cancellation of existing shipments. An exception was granted for jet and bunker fuel stored in bonded facilities and supplies destined for Hong Kong and Macau.

PetroChina Co., Sinopec, CNOOC Ltd., Sinochem Group, and private refiner Zhejiang Petrochemical Co. routinely acquire fuel export quotas from the government, the report said.

China has a large refining industry, but most of its production is directed towards domestic demand, so it is not a key supplier. It ranks third for seaborne exports in Asia, after South Korea and Singapore. However, Beijing’s precautionary restrictions reflect efforts throughout the import-dependent region to focus on domestic needs as the crisis in the Middle East worsens.

Since US and Israeli attacks started at the weekend, almost no oil or fuel has been leaving the Persian Gulf. As a result, refiners from Japan to Indonesia and India are reducing their run rates and stopping exports.

China has made efforts to diversify its hydrocarbon sources recently, yet nearly half of its oil imports still come from the Gulf, including almost all shipments from Iran.

In March, combined exports of gasoline, diesel, and jet fuel are expected to stay near the earlier industry estimate of about 3.8 million metric tons, as companies capitalised on strong Asian margins, it added.

The report further cited LSEG ship-tracking data highlighted that around 70,000 tons of jet fuel (551,600 barrels), 35,000 tons of diesel (260,750 barrels), and 35,000 tons (295,750 barrels) of gasoline have been shipped out so far this month.

China, the world's leading oil importer, manages fuel exports through a quota system to balance domestic supply and demand fundamentals, with its initial quota release for 2026 remaining largely unchanged from a year earlier at 19 million tonnes.