China Fuel Exports Stay Low Despite Eased Quotas, Worsening Asia Shortage

China's fuel exports remain subdued in May despite the government's easing of export quotas, with shipments running at nearly half the volumes seen before the Middle East conflict erupted, according to data from Kpler reported by the Financial Times.

This cautious stance from Beijing is exacerbating the severe fuel shortage across Asia, which is already grappling with the worst oil supply shock in history. Chinese state-owned refiners, which receive the bulk of export quotas, have not significantly boosted shipments of gasoline, diesel, and jet fuel. The reduced outflow means less supply for neighboring Asian markets that rely on Chinese product to meet domestic demand. For fuel traders and refiners, the persistent shortfall supports higher regional crack spreads and keeps product prices elevated, as the market prices in continued tightness. NowPrice's real-time fuel quotes show the latest levels for gasoline and diesel across key Asian hubs.

Looking ahead, market participants will watch for any further adjustments to China's quota allocations in the coming months. If Beijing maintains its cautious approach, the supply gap in Asia could persist, keeping pressure on refining margins and product prices. The next round of quota announcements and any shifts in China's domestic demand will be critical to gauge the trajectory of fuel flows.