On July 8, 2026, trade sources reported that China had relaxed July export restrictions on gasoline, diesel and jet fuel. Authorities also allowed Zhejiang Petrochemical, controlled by Rongsheng Petrochemical, to resume refined-product exports after a suspension of roughly four months.
The adjustment followed disruptions linked to the Iran war and heightened shipping risks in key maritime routes. By easing export controls, policymakers aimed to stabilize refinery operations at home while helping to relieve elevated transportation fuel prices in parts of Asia.
Market participants expected Chinese refiners to export around 3 million tonnes of refined fuels in July, broadly returning to the average monthly level recorded in 2025. Gasoline exports were projected to exceed 400,000 tonnes, diesel shipments were estimated at 600,000 to 700,000 tonnes, and jet fuel exports were expected to reach approximately 1.9 million tonnes.
Export margins remained above 1,000 yuan per tonne for some products, providing refiners with a strong incentive to increase throughput. Higher margins, combined with improved export access, encouraged plants to raise operating rates after a period of constrained overseas sales.
The policy shift also reflects a structural imbalance in China’s domestic fuel market. Road-fuel consumption is being reshaped by the rapid adoption of electric vehicles, the expansion of electric public transport and broader economic changes. At the same time, large integrated refining complexes still require relatively high utilization rates to absorb fixed costs and maintain profitability.
When the domestic market cannot absorb all available gasoline and diesel, exports become an essential pressure valve for refinery economics. Without sufficient export outlets, refiners risk inventory build-ups and margin compression.
Zhejiang Petrochemical’s return to the export market is particularly significant. As one of China’s largest privately controlled refining and petrochemical complexes, its output has the capacity to influence regional supply balances. The resumption of shipments from this facility is likely to increase product availability in Asia.
Renewed Chinese exports may put pressure on Singapore refining margins and intensify competition with export-oriented refineries in South Korea, India and the Middle East. These regions rely heavily on overseas demand, and additional Chinese volumes could reshape pricing dynamics.
Despite the relaxation, China’s fuel trade remains tightly managed through quotas and administrative controls. The July adjustment should not be interpreted as a permanent liberalization of export policy.
Authorities must continue balancing domestic supply security, refinery profitability, emissions targets and international price stability. The latest move appears to be a tactical response to changing market conditions rather than a fundamental shift in long-term policy direction.
