Beijing Freezes Oil Exports as Middle East Conflict Chokes Global Supply

China’s top oil refiners have been ordered to immediately suspend all exports of diesel and gasoline, according to a March 12 report from Bloomberg.

The abrupt export freeze is a direct response to the rapidly escalating conflict in the Persian Gulf, which has begun severely choking crude shipments out of the region. With global supply chains under immense pressure, Beijing is moving to shield its vast internal market and prioritize domestic energy security.

The directive, issued by the National Development and Reform Commission (NDRC)—the country’s top economic planner—is a sign of a region-wide scramble across Asia to prioritize domestic energy security just days into the Middle East war. Sources familiar with the matter told Bloomberg that officials instructed refiners to halt the signing of new export contracts and begin negotiating the cancellation of already-agreed shipments.

Exceptions are currently limited to supplies destined for Hong Kong and Macau, as well as jet and bunker fuel held in bonded storage.

Major state-owned and private entities, including PetroChina Co., Sinopec, CNOOC Ltd., Sinochem Group, and Zhejiang Petrochemical Co., regularly operate under government-allocated export quotas.

While China is the third-largest supplier of refined oil products in Asia—trailing South Korea and Singapore—its refining sector is vast and primarily structured to serve its massive domestic market. Even during peacetime, Beijing strictly controls fuel exports through a quota system managed by the Ministry of Commerce. This framework allows the government to dynamically balance internal supply and respond to geopolitical volatility, a mechanism previously utilized to scale back shipments following Russia’s full-scale invasion of Ukraine in 2022.

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The sudden export freeze highlights China’s acute vulnerability to Middle Eastern instability. Despite active efforts to diversify its hydrocarbon sources in recent years, Beijing still relies on the Persian Gulf for nearly half of its crude oil imports, including absorbing almost all of Iran’s shipments, according to Bloomberg.

With virtually no oil or refined fuel exiting the Persian Gulf since US and Israeli military operations began over the weekend, the ripple effects are paralyzing the Asian energy market. Alongside China, refiners across Japan, Indonesia, and India have also begun slashing operational run rates and suspending their own exports in a desperate bid to preserve national reserves.

China’s hoarding of domestic fuel comes amid the Middle East crisis with Beijing’s efforts to secure alternative crude supplies from heavily sanctioned nations. China had previously significantly increased its imports of Russian oil transported by Moscow’s shadow fleet.

Intelligence data indicated that in January, tankers associated with the shadow network delivered nearly 5 million tons of crude to Chinese ports, making Beijing the largest recipient of these clandestine shipments. With the sudden halt of crude flows from the Persian Gulf due to the escalating war, China’s reliance on these discounted, off-the-books Russian barrels is expected to deepen even further as the country scrambles to keep its vast refining sector operational and its domestic market stabilized.

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