China has imposed an immediate halt on refined fuel exports as authorities move to safeguard domestic energy supplies amid escalating geopolitical tensions tied to the U.S.-Israeli confrontation with Iran, Reuters reports, citing people familiar with the matter.

The export suspension, ordered by the country’s top economic planner, the National Development and Reform Commission, applies to shipments of gasoline, diesel, and aviation fuel that had not cleared customs as of March 11, the four sources with knowledge of the decision said.

The move represents Beijing’s most aggressive step yet to insulate its domestic fuel market from potential disruptions to global oil supply linked to instability in the Middle East.

Pre-Empting Potential Supply Shocks

The decision comes as energy markets increasingly brace for supply disruptions linked to rising tensions involving Iran, a key oil producer whose strategic position near the Strait of Hormuz gives it significant influence over global energy flows.

Roughly one-fifth of the world’s seaborne crude oil passes through the narrow waterway. Any conflict that threatens shipping through the corridor could rapidly tighten global supplies and push fuel prices sharply higher. By restricting exports, Beijing appears to be building a buffer to protect domestic fuel availability in case global supply chains are disrupted.

The export ban goes further than an earlier directive issued last week in which authorities urged refiners not to commit to new overseas fuel sales and to attempt to cancel previously agreed shipments.

Jet Fuel Partially Exempt

Two of the sources said jet fuel destined for aviation bunkering services would not fall under the new restrictions, suggesting Beijing may still allow limited supply flows tied directly to international aviation operations.

However, cargoes of gasoline, diesel, and seaborne aviation fuel intended for export markets are effectively halted if they have not yet cleared customs.

China is the world’s largest crude oil importer and one of the most important suppliers of refined fuel products to the Asian market. In recent years, Chinese refiners have routinely exported surplus gasoline, diesel, and jet fuel when domestic demand softened, particularly during seasonal slowdowns.

Traders had expected refiners to increase shipments in February and March this year, taking advantage of stronger refining margins during the Lunar New Year holiday period, when industrial activity and domestic fuel consumption typically decline.

Market forecasts had placed March exports of gasoline, diesel, and jet fuel—excluding aviation bunkering—at around 2.2 million to 2.3 million tons, roughly 300,000 to 400,000 tons higher than February estimates.

Data from ship tracking services and trading sources show that shipments have instead collapsed.

So far in March, China has exported only about 50,000 tons of gasoline (around 422,500 barrels), 300,000 tons of diesel (about 2.24 million barrels), and 300,000 tons of seaborne jet fuel (roughly 2.36 million barrels).

The sharp drop highlights how quickly authorities have tightened control over outbound fuel supplies.

Implications for global markets

The move could have significant consequences for regional energy markets. China has often acted as a balancing supplier in Asia, exporting refined products when demand weakens domestically and absorbing more crude when domestic consumption rises.

A sudden halt to exports removes a major source of supply for Asian fuel importers, potentially tightening product markets across the region if tensions in the Middle East persist. Countries in Southeast Asia and parts of the Pacific frequently rely on Chinese fuel cargoes to supplement domestic refining capacity.

If the conflict involving Iran escalates further, the simultaneous loss of Chinese exports and potential disruptions to Gulf oil flows could amplify price volatility across global energy markets.

Energy analysts say the export ban illustrates Beijing’s growing willingness to intervene in markets to protect domestic economic stability. With China heavily dependent on imported crude oil, any prolonged disruption to global supply chains could expose the country to fuel shortages or rising prices.

By prioritizing domestic supply over export revenue, Chinese authorities appear to be preparing for the possibility that the geopolitical crisis could evolve into a wider energy shock.

Goldman Sachs has pushed back its expected timeline for U.S. Federal Reserve interest-rate cuts, now projecting quarter-point reductions in September and December 2026 rather than the previously anticipated June start, according to a research note published Wednesday.

The revision comes amid heightened concerns over inflation pressures stemming from the ongoing U.S.-Iran conflict and its impact on global energy prices, even as recent labor-market softening keeps the door open for earlier action if needed.

The Wall Street firm had previously forecast the Fed to begin easing in June, followed by another cut in September. In the updated outlook, Goldman strategists wrote: “By September, we expect both some further labor market softening and progress on underlying inflation to contribute to the case for a cut.”

They added that earlier reductions remain possible “if the labor market weakens sooner and more substantially than expected.”

The note arrives against a backdrop of significant market turbulence driven by the Middle East conflict, now in its second week. Brent crude futures have surged past $104 per barrel in recent sessions — levels not seen since mid-2025 — after U.S. and Israeli strikes on Iran disrupted production and led to a near-total halt in shipping through the Strait of Hormuz. Goldman highlighted that sustained energy-price increases could feed into broader inflation and inflation expectations, complicating the Fed’s path to policy normalization.

Despite the oil shock, the brokerage emphasized that a sufficiently sharp deterioration in labor-market conditions would likely override inflation concerns.

“If the labor market weakens enough to warrant earlier rate cuts, concerns about higher oil prices feeding into inflation or inflation expectations are unlikely to prevent the Fed from easing sooner,” the strategists wrote.

Labor Market and Inflation Signals

A weaker-than-expected February jobs report has kept alive concerns over cooling employment momentum, with nonfarm payrolls growth slowing and the unemployment rate ticking higher in recent months. Goldman sees this trend as supportive of eventual easing but not yet decisive enough to prompt immediate action.

Traders are currently pricing in only a ~41% probability of a 25-basis-point cut at the Fed’s September meeting, according to CME Group’s FedWatch tool. The central bank is widely expected to leave its benchmark rate unchanged at the upcoming two-day policy meeting ending March 18, with February CPI data (due Wednesday) and core PCE inflation (due Friday) likely to show persistent pressures above the 2% target.

The Fed outlook revision reflects a broader risk-off environment. Global equities have come under pressure, with the pan-European STOXX 600 down 0.7% Wednesday after earlier steep declines. Asian stocks were mixed overnight, while U.S. futures traded flat. The U.S. dollar has strengthened as the dominant safe-haven asset, gaining ground against major peers despite geopolitical uncertainty.

The Middle East conflict continues to dominate sentiment. Iran has declared the Strait of Hormuz closed, with threats to attack vessels, halting tanker traffic, and driving up freight rates. Saudi Arabia’s Ras Tanura refinery remains offline after a drone strike, and disruptions persist across Iraqi Kurdistan fields and Israeli gas production. The IEA has proposed the largest-ever release of strategic reserves, and G7 energy ministers have endorsed using stockpiles, though no coordinated action has been confirmed.

Implications for Monetary Policy and Economic Growth

Goldman’s delayed timeline aligns with a growing consensus that energy-driven inflation could delay the Fed’s easing cycle. A sustained oil-price shock — if the conflict prolongs — would raise input costs, fuel inflation expectations, and potentially force the Fed to hold rates higher for longer, weighing on growth-sensitive sectors.

However, the brokerage stressed that labor-market weakness could override inflation concerns. If payrolls deteriorate further and unemployment rises meaningfully, Goldman sees the Fed prioritizing employment support over temporary energy-price pressures — a view consistent with the central bank’s dual mandate.

For markets, the revised outlook adds to near-term uncertainty. Higher-for-longer rates would pressure rate-sensitive assets (tech, real estate, small caps) while supporting the dollar and financials. Energy equities and commodities remain beneficiaries, though volatility is elevated.

The Fed’s March meeting will provide the next major signal, with CPI and PCE data likely to shape expectations for the balance of 2026. If Middle East tensions ease and oil prices stabilize, Goldman’s September-December timeline could prove conservative. If the conflict drags on or escalates, inflation risks rise, potentially pushing rate cuts even further out.

So far, the conflict is showing no clear sign of ending, and energy markets remain in flux, exposing economies to a dilemma.