BEIJING — China’s domestic diesel and gasoline inventories are dropping sharply, raising the likelihood that Beijing could reinstate export restrictions on refined petroleum products into the fourth quarter.

According to fuel inventory data from commodity research firm JLC International, gasoline stockpiles at state-owned energy majors fell 2.9% last week to their lowest levels since 2022. Diesel holdings similarly declined by 2.4%, touching a 15-month low.

Potential Fourth-Quarter Export Limits

The rapid inventory drawdowns reflect a tightening domestic fuel market, which analysts warn could force state regulators to prioritize domestic supply over overseas shipments.

"With the domestic market tightening, we see an increasing risk that Beijing could restrict monthly clean product exports to around 1.2 million tons in the fourth quarter," said Jianan Sun, an analyst at Energy Aspects.

  CHINA CLEAN PRODUCT EXPORT TRAJECTORY (2026) [March] ──► Temporary Export Suspension Enacted (Middle East Escalation) [June-July] ──► Restrictions Eased; Exports Peak at ~2.55M Tons (July) [Q4 Est.] ──► Projected Export Cap at ~1.2M Tons/Month (Stockpile Depletion)

Echoes of Spring Restrictions

The potential restrictions follow similar emergency interventions enacted earlier this year.In early March, as conflict in the Middle East sparked energy security concerns across the region, Beijing ordered state refiners to suspend new export contracts and cancel previously arranged shipments.

That initial export halt allowed Chinese state refiners to rebuild reserves. Authorities later relaxed those curbs in April and May, leading to a surge in fuel exports through June and July—including a high in fuel oil shipments—as Chinese refiners helped fill global supply shortfalls created by Middle Eastern refinery outages.

Global Market Impact

A fresh round of Chinese export limits could compound supply pressures in a global market already facing seasonal demand surges and constrained middle distillate inventories. Because few alternative exporters possess immediate spare refining capacity, any reduction in Chinese cargoes threatens to push global diesel and jet fuel crack spreads higher.

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