Chinese authorities signal a softening of the export ban imposed at the onset of the Iranian conflict to protect domestic reserves.
China plans to resume exports of aviation fuel, gasoline, and diesel starting in May. According to informed sources, major state-owned oil companies in China have already applied for export permits. This move could significantly alleviate the global shortage caused by the war in Iran, bb.lv reports, citing the Financial Times.
China is the world's largest oil importer and a major exporter of aviation fuel and diesel to Australia, Japan, Vietnam, the Philippines, Bangladesh, and other countries. According to Kpler data, before the war began, China exported nearly 800,000 barrels of petroleum products per day. In April, this figure was cut by about half.
China Comes to the Aid of Asian Countries
Asia has been hit harder by the current energy crisis than other regions, as its refineries are 80% dependent on imported raw materials, with about half of that volume coming from the Persian Gulf. China has already agreed to sell some fuel to countries in the region on a humanitarian basis.
"The resumption of petroleum product exports could significantly ease supply shocks in Southeast Asian countries. Within Asia, China is the only country with the capacity for large-scale exports," notes Liao Na, founder of the analytical company GL Consulting.
She added that the previously existing intergovernmental support schemes between China and these countries are unlikely to fully cover the deficit. A source in an international trading house confirmed that several state-owned refineries in China have already been allocated new export quotas.
Market Maneuvers: Reserves and Oil Redistribution
Marco Dunand, CEO of Swiss commodity trader Mercuria, noted last week at the FT Commodities Global Summit in Lausanne that Chinese companies have been "aggressively selling crude oil" in the last two to three weeks, redirecting previously purchased cargoes to other countries.
In his opinion, this may be a sign that Chinese refineries are sourcing oil from strategic reserves or from Iranian sellers. It may also indicate that Beijing is anticipating the soon reopening of the Strait of Hormuz.
In March, China replenished its reserves by 40 million barrels of crude oil, while refineries slowed production by about 1 million barrels per day. Despite record stocks accumulated before the war, Beijing remains extremely concerned about the risks of supply disruptions. Last month, authorities also tightened controls on the export of certain types of fertilizers.
How China Balances the Fuel Market
Foreign analysts and officials have criticized Beijing, claiming that trading partners were not given complete information about export restrictions, which exacerbated concerns about energy supply. Earlier, experts warned that a significant change in Beijing's position is unlikely until full shipping resumes through the Strait of Hormuz.
However, according to the research group Rystad, citing Vortexa statistics, some fuel shipments were sent to Vietnam, Malaysia, and Singapore during April. These exceptions, according to Rystad analysts, could reflect both regional supply shortages and diplomatic considerations.
As bb.lv reports, China's resumption of fuel exports is a signal that could significantly ease tensions in the energy market, especially in Asia, which has been hit harder than others by the crisis. Additional supplies could partially offset the deficit and stabilize prices, but they will not fully resolve the issue.
