China's Refined Oil Exports Rise in May Despite Imposed Restrictions

SadaNews Economy - China's exports of gasoline, diesel, and jet fuel rose in May compared to April, to key destinations in Southeast and South Asia, although they still remain significantly lower than last year's levels due to export restrictions imposed due to the Iran war, aimed at protecting domestic supplies.

The Iran war has caused a global crude oil supply shortage due to the closure of the Strait of Hormuz, leading to an energy crisis in some countries, mostly from Asia. China, fearing supply shortages, decided to impose restrictions on gasoline and diesel exports.

Customs data released on Saturday showed that exports of refined petroleum products outside Hong Kong and Macau rose by 40 percent in May compared to April, despite a 69 percent decline compared to the same period last year.

The export restrictions do not include supplying international ships and planes with fuel or exports to Hong Kong and Macau, where the levels remained stable.

Following the announcement of the preliminary agreement between the US and Iran concerning the war, analysts expect the agreement to allow the release of more than 85 million barrels of trapped oil waiting to cross the Strait of Hormuz. The agreement also includes the lifting of US sanctions on Iranian oil, which will add more supply.

Before the war, about 20 percent of the world’s oil and liquefied natural gas supplies passed through the Strait of Hormuz, but recovery in flows and production after the agreement may take several months.

Chinese customs data reported a drop in China’s gasoline exports to their lowest level in a decade in April, exceeding just 23,400 metric tons, then improved slightly in May to reach 32,838 tons, with Myanmar being the only destination, alongside Hong Kong and Macau, receiving 8,405 tons of gasoline from China.

In May, diesel exports, including biodiesel, rose by 53 percent compared to April, as quantities exported, excluding Hong Kong and Macau, doubled, reaching 216,196 tons, of which 62,772 tons went to Bangladesh and 28,700 tons to Sri Lanka.

The total diesel exports to Southeast Asian countries, including Myanmar, Cambodia, Laos, and Thailand, amounted to 77,079 tons.

Australia received 20,255 tons, being the only non-Asian importer of diesel.

Biodiesel exports rose by 11.5 percent from April to 43,636 tons in May, with the Netherlands and Belgium being the largest importers.

It remains unclear whether Beijing's export restrictions include biodiesel, which is primarily made from used cooking oil.

Excluding Hong Kong and Macau, jet fuel exports fell by 61 percent to 499,388 tons, but increased by 20 percent from April.

Chinese jet fuel exports include both aviation fuel designated for refueling and cargo shipments.

Vietnam received the largest share, with over 97,900 tons, while Australia secured 79,000 tons from the agreed quantity following discussions between the two countries in May.

Oil Prices

Oil prices declined after the announcement of the US-Iran agreement regarding the war, trading near $80 per barrel, with Brent crude recording weekly losses of about 8 percent at the end of Friday's trading after the agreement was announced.

Brent crude was at $80.38 per barrel, while West Texas Intermediate was at $77.54.

This comes at a time when transit traffic through the Strait of Hormuz has increased since the announcement of the agreement.

On the global demand front, the Organization of the Petroleum Exporting Countries (OPEC) stated in its report on global oil forecasts for 2026 that global demand is set to rise to 113.3 million barrels per day in 2030, up from 105.1 million barrels per day in 2025.