After Chinese refiners suspended the export of refined oils in October, they have begun seeking new sources of supply due to the tight global fuel market caused by the situation in the Middle East and the Russia-Ukraine conflict. Reuters analyzed on October 5 local time that India could be the best candidate to fill the supply gap left by China.
Reuters previously cited four sources as saying that in order to ensure domestic supply, Chinese refiners suspended the export of refined oil products to regions outside Hong Kong and Macau in October. It is currently unclear whether these exports will resume after the National Day holiday on October 7. The sources said this may depend on China's domestic fuel inventories and refinery production levels.
The decision by China has attracted international attention, partly because the global supply of refined oil products is already quite tight.
Affected by the war between the United States and Israel and Iran, the supply and transportation of oil in the Middle East have been disrupted. At the same time, ongoing attacks by Ukraine on Russian refining facilities have further reduced global refining capacity, leading to a particularly tight supply of diesel. Although exports of Middle Eastern crude oil have recently recovered significantly, international oil prices remain high. Insufficient transportation, insurance, and refining capacity are becoming new bottlenecks.
In this context, India could become an important 'filler'.
According to Reuters, India has the fourth largest refining system in the world, with 23 refineries processing approximately 5.6 million barrels of crude oil per day. Although its overall refining capacity is much lower than that of China, India is a highly export-oriented country for refined petroleum products.
Data shows that in 2025, India's exports of diesel, gasoline, and aviation fuel will total approximately 47 million tons, which is significantly higher than China's 25.4 million tons. In other words, in terms of actual export volumes, India is already a larger exporter of refined fuels than China.
Since the beginning of this year, India's export capacity has been affected by the situation in the Middle East. In the first nine months of 2026, India's exports of these three types of fuels decreased by approximately 23%, with the decline reaching nearly 8 million tons. The Indian government has also increased the taxes on fuel exports in order to prioritize domestic supply.
But the situation is changing.
India has lowered the fuel export tax twice in a row, and at the same time, the supply of crude oil from the Middle East has rapidly recovered. According to Kpler data, India's imports of crude oil from the Middle East in September exceeded 11.3 million tons, reaching the highest level since February. This means that Indian refineries have access to more raw materials, which also creates conditions for expanding exports of refined products.
Reuters believes that Singapore and Australia could become the first destinations for India to expand exports. At the same time, as China temporarily withdraws from the export market, Asian markets such as Indonesia, Vietnam, and the Philippines, which previously relied heavily on Chinese fuel supplies, may also shift their reliance to India.
Reports suggest that what is even more concerning is that the suspension of exports by China may not only lead to short-term supply shortages.
For a long time, China's extensive refining system has played the role of a "regulator" in the Asian refined oil market: when international markets are strained with supply shortages, increased exports from China can alleviate pressure; when domestic supply security is at risk, exports can be reduced.
According to Reuters analysis, as India's crude oil supply resumes, export restrictions are lifted, and refining capacity is released, India has the opportunity to play a more important role in marginal supply.
"China's export suspension is likely only temporary. A more significant issue is that as China exits the market, the global fuel market is being forced to find out who can step up." Reuters reported.
