• China has signaled tighter or halted exports of jet fuel, prioritizing domestic supply.
  • Asian countries dependent on Chinese fuel face supply shortages and price spikes.
  • Refiners across the region scramble for alternative sources, driving up margins.

China Tightens Jet Fuel Exports

Beijing has moved to restrict exports of jet fuel, alongside diesel and gasoline, in a bid to shore up domestic supply, according to people familiar with the matter. The move, which caught many regional buyers off guard, is already reverberating across Asian aviation markets.

China's export quotas for refined products have been slashed in recent weeks, with jet fuel allocations particularly squeezed. The country, a major supplier to Southeast Asian nations, typically exports around 200,000 barrels per day of jet fuel, much of it going to countries like Vietnam, the Philippines, and Thailand.

Supply Crunch Hits Airlines

Airlines across Asia are now grappling with surging fuel costs and potential shortages. Spot jet fuel prices in Singapore, the regional benchmark, have jumped over 10% in the past week, according to data from S&P Global. "Without access to Chinese supplies, we're seeing a mad scramble for cargoes from the Middle East and India," said a Singapore-based trader at a global trading house.

The impact is particularly acute for budget carriers, which operate on thin margins. "If this persists, we'll have no choice but to raise fares or cut flights," said a procurement executive at a major Southeast Asian airline, speaking on condition of anonymity.

Alternatives and Adjustments

Refiners in South Korea, Japan, and India are ramping up output to fill the gap, but availability is limited. "There's only so much spare capacity in the region," said an analyst at a consultancy. "We could see prices remain elevated for months."

Meanwhile, some governments are exploring emergency measures. The Philippines' Department of Energy said it is in talks with suppliers to secure additional volumes, while Vietnam's state-owned Petrolimex is seeking spot cargoes.

Geopolitical Implications

The export curbs come amid broader energy market volatility, with tensions in the Middle East and shipping disruptions in the Red Sea. China's move underscores its priority on domestic energy security, even at the cost of straining ties with neighbors. "This is a reminder that Beijing will put its own needs first," said an analyst. "It's a wake-up call for importers to diversify."

Correction: A previous version of this article misstated the percentage change in jet fuel prices. The correct figure is a 10% increase.