China has recently stopped exporting petroleum products to destinations other than Hong Kong and Macau this month. This action could lead to a reduction in supply to major buyers such as Singapore, Malaysia, and Australia.
Increase in Refining Margins
The reduction in fuel supply from the world's largest refining hub has pushed the refining margins for Asian refineries producing gasoline to an unprecedented $50 per barrel above the price of Brent crude oil. This record was set on October 1st and reflects the direct impacts of China's decision on the oil market.
Decline in Imports in Singapore
According to data from ship tracking company Kpler, Singapore, as China's largest gasoline customer, imported 1.772 million tons (equivalent to 14.97 million barrels) of gasoline from the country in the first nine months of this year, which is 62% less than the total imports for 2025. The storage of light petroleum products in Singapore has reached its lowest level in five years. Meanwhile, traders in Singapore are blending gasoline for re-export, with Indonesia recognized as the main destination for this type of gasoline.
Indonesia's Response to Developments
Mohammad Baron, spokesperson for Indonesia's state-owned energy company (Pertamina), stated that the company is closely monitoring developments related to China's fuel export policies. He also added that Pertamina has a diverse supply portfolio and continues to increase domestic production and develop biofuels to reduce dependence on imports.
Jet Fuel Market Status
Jet fuel constitutes a major part of China's exports, primarily sent to Hong Kong, which is exempt from China's export restrictions. Kpler data shows that Singapore, after Hong Kong, is the largest importer of diesel from China, followed by Australia, Malaysia, and Bangladesh. Australia has now become the second-largest importer of China's jet fuel, with its gasoline storage equivalent to 42 days of consumption.
However, the direct impact of this situation on Australia is limited, as the main fuel imports for the country are diesel, which is primarily sourced from South Korea, Taiwan, Brunei, and Malaysia. Nevertheless, the halt of China's oil shipments to the global market could lead to price increases for all buyers.
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