China eases controls on fuel exports for a second month
China has further relaxed limits on refined fuel exports for a second month in August, five industry sources said on Wednesday, an unexpected move that facilitates the return of flows to pre-war levels.
Beijing on Tuesday granted refiners temporary approval to ship 2.7 million metric tons to destinations excluding Hong Kong and Macau this month, the sources said.
China, the world's largest oil importer, slashed fuel exports from March through June to protect domestic supplies after the Iran war disrupted crude flows and forced a sharp cut in imports.
It started loosening the export tap in July following an interim peace deal between the U.S. and Iran. The latest allowances for August came as surprise to several trade sources.
Refiners are also allowed to roll over some of the August allowances to September because of the tight timeline for spot sales, three of the people said, which can result in export volumes being smaller than permitted.
Including shipments to Hong Kong and jet fuel refueling for international flights at Chinese airports, the August export program for gasoline, diesel and jet fuel is estimated by two trade sources to reach 3.6-3.7 million tons.
That compares with average monthly exports of 3.04 million tons of gasoline, diesel and jet fuel combined in 2025, based on Chinese customs data, and is also above refiners' planned July exports of 2.5 million tons.
But given the tight scheduling window and as refiners still face uncertainty receiving crude oil amid the Middle East conflict, "it's highly likely that refiners end up exporting way below the allowed volumes", said a state oil trading manager.
The National Development & Reform Commission, which oversees fuel quotas, did not immediately respond to a request for comment.
Requirement on fuel inventories. Of the total 2.7 million tons allowed, state-run refiners were allotted 2.2 million tons while Zhejiang Petrochemical Co, majority owned by private group Rongsheng Petrochemical 002493.SZ, was given 500,000 tons.
Rongsheng, which resumed exports in July after a halt of more than three months, did not immediately respond to a request for comment.
Refiners must prove that they have enough stockpiles for local sales and hit a certain production plan before receiving approval for export quotas, trade sources said.
For now, August Chinese refinery throughput is expected to rise, with analysts and traders forecasting to grow an extra 200,000-300,000 barrels per day from July's total estimate of nearly 13 million barrels per day.
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