China's diesel exports have decreased to 500,000 tons in November. This decline follows an increase in diesel exports since July and a drop in domestic storage to its lowest level in several years. According to trade data, Chinese refineries have sold only about 500,000 tons of diesel for loading this month.
Reasons for the Decline in Diesel Exports
Since the beginning of the war between the United States and the Israeli regime against Iran in February, China's fuel exports, which are a supplier to Asia, have faced significant fluctuations. The Chinese government has imposed restrictions on diesel exports to prioritize domestic supply needs and has required refineries to obtain necessary permits for monthly sales.
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However, analysts believe that since the easing of export restrictions in July, the country's diesel exports have reached their highest level in recent years. For example, China exported 1.33 million tons in August and 1.8 million tons in September, leading to a reduction in storage levels in the country.
Storage and Price Situation
According to preliminary estimates, China's diesel exports this month are expected to drop to less than 800,000 tons, the lowest volume since July. In this context, two sources reported that at least two more shipments are planned for the second half of November.
Despite the fact that the export margin increased to 800 yuan (120.30 dollars) per ton last week, the decline in diesel exports seems necessary due to the drop in China's fuel storage and steady demand in the domestic market. According to data from the consulting firm OilChem, China's commercial diesel storage fell to 11.1 million tons (equivalent to 83 million barrels) by the end of October, the lowest level since records began in 2011.
The company also reported that the wholesale price of diesel in Shandong province, China's refining hub, has reached over 10,000 yuan per ton, the highest price since 2018.
Truck drivers in several provinces, including Guangdong and Hebei, have also reported fuel rationing and difficulties in obtaining diesel. This situation appears to be a result of export restrictions and reduced refinery production.
With the issuance of China's fourth export quota package, it is expected that the country will increase its exports in the last two months of 2026. The total annual quota for China will reach 42 million tons, which is 6 percent higher than last year. Customs data shows that China exported over 23 million tons of three types of fuel: gasoline, diesel, and jet fuel from January to September.
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