China is likely to cut fuel exports in October amid falling domestic gasoline and diesel stocks to seven-year lows. In August, Chinese refineries exported 6.01 million tons of petroleum products, which is 12.7% more than a year earlier. This recovery occurred after Beijing lifted export restrictions in mid-July.
The total export volume exceeded pre-war levels, and jet fuel supplies reached a historic high. In September, exports are also expected to remain strong. However, in October, they may decline: according to GL Consulting (owned by MySteel), gasoline and diesel stocks in the country are at a seven-year low. China has not yet announced official plans for October. "Domestic supply is already relatively tight, and domestic demand is strengthening, so refineries are likely to prioritize the domestic market," notes GL Consulting. "This should reduce petroleum product exports in the near term, redirecting barrels that would otherwise go abroad back into the domestic balance."
Analysts expect the stock deficit to persist until the end of October. On one hand, fuel exports surged from July to September, taking additional barrels from the domestic market. On the other hand, the peak summer travel season supported gasoline demand, while the autumn harvest and pre-season stocks ahead of the traditional September-October peak support diesel consumption. "This is not just a story about stocks: it’s a story about the balance of supply and demand," emphasizes the consultant.
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