Despite a ban on fuel exports from early this month, China has delivered cargoes of diesel and other fuels to Southeast Asia in recent days in a sign that Beijing seeks to alleviate the regional crisis and retain diplomatic leverage.
Two weeks after the war in the Middle East began and after it became clear that the Strait of Hormuz wouldn’t be re-opening within days, China banned all fuel exports as crude supply from the Middle East crumbled and forced Asian refiners to turn to alternatives.
The restrictions took immediate effect on March 12 and applied to all cargoes that had not passed through customs as of March 11.
Over the weekend, cargoes from China were observed to arrive at ports in the Philippines and Vietnam, two of the Southeast Asian countries worst hit by the supply loss from the Middle East.
The Ding Heng 36 and Auchentoshan tankers this weekend delivered over 260,000 barrels of diesel to the Philippines, according to ship-tracking data compiled by Bloomberg. Another vessel, Great Ocean, delivered around 100,000 barrels of distillate fuels to Vietnam this weekend, the data showed.
The cargoes may have been cleared for export before the Chinese ban. They would still come as some relief to the struggling Southeast Asian nations that found themselves short on fuels and amid a major oil shock supply and price crisis.
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The Philippines, for example, last week declared a national energy emergency, the first country in the world to do so, after gasoline and diesel prices doubled since the war began. The Philippines depends on imports from the Middle East for 98% of its oil needs.
Vietnam, for its part, temporarily removed the value-added tax on gasoline, diesel, and jet fuel until April 15, while local airlines will slash routes as of April 1 amid a major aviation fuel crunch.
By Tsvetana Paraskova for Oilprice.com
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