China is again restricting exports of diesel, jet fuel and gasoline, threatening to squeeze global energy markets already strained by fuel supply disruptions. China’s state-owned oil giants have recently started slowing exports of refined products, according to oil analysts in regular contact with the companies. Shipments are continuing to countries with close ties to Beijing, including Cambodia, but the government has stopped granting new commercial export permits to wider global markets.
The move echoes restrictions Beijing imposed in March after the war in Iran disrupted oil flows through the Strait of Hormuz. The sudden drop in Chinese fuel exports sent Asian countries scrambling for alternative supplies. Those restrictions were eventually eased.
But this time, the curbs come as diesel markets are already contending with diminished supply. Russia this week renewed a ban on diesel exports after Ukrainian drone attacks damaged refineries that also supply fuel to Russian forces in eastern Ukraine. A fire at an Indian refinery on Tuesday prompted its owner to halt some exports of refined products, including diesel, to prioritize domestic customers.
And in the United States, President Trump has threatened to restrict diesel exports so as to lower costs for truckers ahead of the midterm elections. China’s latest move sent diesel prices up 5 percent on Wednesday and Thursday in Singapore, Asia’s main energy trading hub, even as crude oil prices fell almost 10 percent. Diesel prices gave up their gains on Friday, returning to about $170 a barrel after European countries discussed whether to release diesel strategic reserves into the market.
Jet fuel prices have also climbed in East Asia, raising the prospect of higher airline costs and ticket prices.
Source: New York Times Top Stories · Summarized by HeadlinesBriefing