China has issued 19 million tons of export quotas for refined oil products in the first batch of allowances for 2026, underscoring Beijing’s continued use of administrative controls to balance domestic fuel supply with its role as a major exporter in regional and global energy markets.
According to three trade sources familiar with the allocations, who spoke to Reuters, the quotas cover gasoline, diesel, and jet fuel, with volumes largely unchanged from the first batch released for 2025. In addition, authorities granted 8 million tons of export quotas for low-sulphur marine fuel, a product that has become increasingly important as global shipping complies with stricter environmental standards.
China, the world’s second-largest oil consumer and one of the biggest refining hubs globally, manages refined fuel exports through a quota system aimed at preventing domestic shortages, stabilizing prices, and ensuring refineries align output with local demand conditions. The steady size of the first 2026 tranche suggests policymakers are maintaining a cautious stance, avoiding aggressive increases in exports while leaving room to adjust later in the year depending on economic conditions and fuel demand.
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State-owned oil giants once again dominated the allocation. Sinopec and China National Petroleum Corporation (CNPC), the country’s two largest refiners, were awarded a combined 13.76 million tons of export allowances for gasoline, diesel, and jet fuel, accounting for more than 70% of the total volume. Their dominant share reflects Beijing’s preference for relying on state firms to execute energy policy objectives, particularly during periods of economic uncertainty.
Major private refiner Zhejiang Petrochemical received 1.56 million tons in this first batch, maintaining its position as the leading non-state beneficiary of export quotas. While private refiners have expanded rapidly over the past decade and now account for a significant share of China’s refining capacity, their access to export quotas remains tightly controlled, with state companies retaining the lion’s share.
A similar pattern emerged in the allocation of low-sulphur marine fuel quotas. Of the 8 million tons issued, almost 85% went to Sinopec and CNPC, reinforcing their central role in supplying bunker fuel to international shipping markets. China has become a key supplier of compliant marine fuel in Asia, particularly after the International Maritime Organization’s 2020 sulphur cap reshaped global bunker demand.
The steady quotas come against a backdrop of softer refined fuel exports this year. In the first 11 months of 2025, China exported 52.65 million tons of refined oil products, including gasoline, diesel, aviation fuel, and marine bunker fuel, down 3.2% from the same period a year earlier. Traders attribute the decline to weaker refining margins, uneven overseas demand, and Beijing’s preference for keeping more fuel at home amid sluggish but still uncertain domestic consumption trends.
Market participants say the early issuance of the first 2026 batch provides refiners with planning visibility while signaling that authorities are unlikely to significantly loosen export controls in the near term. Subsequent quota rounds later in 2026 will likely depend on factors such as domestic fuel demand, refinery utilization rates, oil prices, and broader economic conditions.
With global fuel markets still shaped by geopolitical tensions, energy transition policies, and uneven post-pandemic demand recovery, China’s quota decisions remain a closely watched barometer of how aggressively it intends to compete in refined product exports next year.
