China has suspended refined fuel exports, Bloomberg reported on March 12, confirming what refinery sources had been warning since March 4 — that Beijing quietly ordered its state refiners to stop sending fuel abroad and focus entirely on keeping domestic supply secure as the Middle East war chokes crude flows through the Persian Gulf.
The world’s largest refining nation has effectively taken itself off the global fuel market. The consequences are already showing up in prices that have never been seen before.
Jet fuel traded at $231.42 per barrel at the Asian close on March 4 — an all-time record, up 77.7% in a single day from $130.23 the previous session. The previous record was $173.74 per barrel, set during the post-pandemic commodity surge in June 2022. That record lasted nearly four years. China’s export freeze broke it overnight.
The crack spread — the margin between jet fuel and the crude it is refined from — hit $145.07 per barrel on March 4, tripling in 24 hours from $47.88. These are not normal market movements. These are supply shock numbers.
What China Actually Did
The move began not with a formal regulation but with a phone call. On March 4, the National Development and Reform Commission’s Department of Trade verbally directed companies at a meeting to halt all clean product exports with three narrow exceptions: bonded jet fuel for aircraft departing China, bonded marine fuel for ships leaving Chinese ports, and supplies to Hong Kong and Macau.
Everything else — gasoline, gasoil, jet fuel bound for international markets — stopped.
Seven state-owned refinery sources, two analysts and two traders confirmed the directive to S&P Global’s Platts on March 5. The NDRC did not issue a formal written order. It did not need to. Oral guidance from China’s top economic planner carries the full weight of policy. Refiners reviewed their export schedules overnight.
The instruction was specific: stop signing new export contracts immediately. For contracts already signed with shipping schedules arranged, try to negotiate cancellations. For contracts signed but without shipping schedules, do not export. The general directive, as one source described it: avoid exporting if possible.
Bloomberg’s March 12 confirmation that refineries have been told to pause cargoes signals the freeze is hardening, not softening, as the conflict continues.
Why China Did It
China’s logic is straightforward and rational from a national security standpoint. The country imports significant volumes of crude oil from the Middle East. With the Strait of Hormuz effectively closed to normal tanker traffic following Iran’s attacks on shipping and its vow that no oil will leave the Gulf while the war with the United States and Israel continues, Chinese refiners face feedstock uncertainty.
If crude stops arriving, refineries cut runs. If refineries cut runs, domestic fuel supply tightens. Beijing’s calculation: protect domestic supply first, export later if surplus exists. Given that China holds substantial crude reserves, the government’s view is that refiners should draw on those reserves for domestic needs rather than refine for export markets during a global supply crisis.
One Shanghai-based analyst described the government mandate as a type of force majeure — a declaration that overrides even existing long-term contracts. “Once force majeure is declared, long-term contracts also become nothing but scraps of paper,” the analyst said.
The Scale of What Has Left the Market
To understand the impact, consider what China was exporting before the freeze. In 2025, China exported 41.41 million metric tonnes of clean oil products — averaging 3.45 million metric tonnes per month. March exports, where most certificates had already been issued before the freeze, are expected to come in around 2.5 million metric tonnes — still a significant cut. April is where the real shock hits.
A London-based analyst estimated April jet fuel exports at just 1.18 million metric tonnes — almost entirely bonded refueling for aircraft leaving China — alongside roughly 120,000 metric tonnes of gasoline and 300,000 metric tonnes of gasoil. That is a collapse from normal levels that will ripple through every aviation fuel market in Asia and beyond.
China was previously estimated to export approximately 2.51 million metric tonnes of jet fuel in March alone. The April figure represents a reduction of more than 50% from normal monthly volumes.
What This Means for Airlines
Jet fuel accounts for the majority of China’s clean product exports. With Singapore jet fuel already at an all-time record price and crack spreads tripling overnight, airlines that source fuel in Asian markets are facing cost structures that make the economics of many routes borderline unviable.
India’s IndiGo and Air India are already seeking regulatory exemptions from pilot duty hour rules because their flights are getting longer due to Middle East airspace closures. Their fuel costs are simultaneously exploding. China’s export freeze removes one of the key regional sources of jet fuel supply that might otherwise have provided some price relief.
A jet fuel trader based in Northeast Asia put it plainly: run cuts in the region are inevitable, feedstock cannot be sourced, and the likely sequence is cargo buybacks, production cuts, and further export controls. The feedback loop between crude supply disruption and refined product availability is tightening across the entire region simultaneously.
The Broader Picture
China’s fuel export freeze is the latest domino in a chain that began with the Strait of Hormuz closure. Iran disrupted crude flows. Crude prices surged — MCX crude hit ₹8,593 in India on Thursday, up nearly 6% in a single session, with Goldman Sachs warning of 2008 peak prices. The IEA released 400 million barrels of strategic reserves. ING said it wasn’t enough. Australia lowered its fuel quality standards to redirect export-grade petrol into domestic supply. And now China — the world’s largest refiner — has pulled its fuel exports off the global market entirely.
Each of these actions makes sense individually as a national response to supply pressure. Together, they describe a global energy system under severe and simultaneous stress, with every major player hoarding supply and markets adjusting prices at a speed that hasn’t been seen since the worst moments of the 2022 commodity shock.
The all-time record for jet fuel lasted four years. It lasted one day once China stopped exporting.
This article is for informational purposes only.