Oil prices jump $3 after China halts fuel exports, global supply fears rise

Global oil prices rose by $3 on Thursday after China suspended exports of petroleum products, heightening concerns over supply shortages in international markets. Brent crude for December delivery reached $101.06 per barrel as of 14:52 GMT, up 3% or $3.02 from the previous settlement.

The November Brent contract closed yesterday at $103.50 per barrel, posting monthly gains of nearly 14% in September for the nearest-term contract. US West Texas Intermediate crude also climbed $1.67, or 1.9%, to $92.09 per barrel after nearing $93 earlier in the session. Prices fluctuated throughout the day, dropping more than 1% in early trading before rebounding.

According to four informed sources, Chinese refiners have suspended exports of petroleum products outside Hong Kong and Macau until further notice, adding pressure to markets already affected by conflict. Giovanni Staunovo, an analyst at UBS, noted that China's ban reflects concerns over domestic product availability, though its impact on crude imports remains unclear.

Global diesel supplies have tightened as refining capacity has fallen due to attacks linked to conflicts in the Middle East and Ukraine, prompting governments to intervene to protect consumers. Nitesh Shah, a commodities expert at WisdomTree, said China's export suspension removes a flexible supply source at a critical time, with alternatives dwindling for importers amid Middle East disruptions.

Three sources reported that the administration of US President Donald Trump asked Germany and France to tap emergency diesel reserves to help lower global prices, threatening a possible US ban on diesel exports if they did not comply.

Diesel refining margins in Europe stood at $78.22 per barrel as of 11:45 GMT, down about 6% from the previous session after hitting a record $95 on September 23. In Asia, gasoline margins rose to $50.53 per barrel above Brent, driven by refinery outages and China's export ban.

Investors continued to monitor diplomatic efforts and oil exports from the Middle East. Sources indicated that Iran is preparing a broader response if the US resumes attacks, while still pursuing diplomatic efforts despite slim chances of success. Markets were reassured as Saudi Arabia resumed oil loadings from Yanbu after restarting the East-West pipeline.

Goldman Sachs reported that oil exports from Gulf states, including undisclosed shipments, recovered to 23.3 million barrels per day last week, in line with the 2025 average, with exports doubling in September. Two sources told Reuters that the OPEC+ alliance is likely to keep November production targets unchanged at its upcoming meeting on Sunday.