CHINA has halted exports of refined fuel as the worsening crisis around the Strait of Hormuz disrupts global oil flows and raises concerns over domestic energy security.

Sources familiar with the matter told Reuters that the suspension covers gasoline, diesel, and jet fuel shipments that had not cleared customs as of March 11. The restrictions are effective immediately as Beijing seeks to ensure sufficient fuel supply for its domestic market, according to Oilprice.com.

Earlier in the month, Chinese authorities had already instructed state-owned refiners to explore cancelling export cargoes and halt new export commitments in anticipation of tighter crude supply. The directive was aimed at preventing shortages at home as tensions in the Middle East began to disrupt oil shipments.

China is one of Asia’s largest exporters of refined fuel, ranking behind South Korea and Singapore. The suspension of shipments could have provided a boost to refining margins in other Asian markets, but the move is largely being driven by concerns over tightening crude supply caused by disruptions to tanker traffic through the Strait of Hormuz.

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Despite the turmoil, China remains relatively better positioned than many Asian energy importers. The country has been building crude oil reserves for more than a year and is also expanding its storage capacity to strengthen energy security.

Data from Kpler earlier this week showed that roughly 40 million barrels of sanctioned crude from Russia, Iran, and Venezuela are currently stored on tankers off China’s coast. More than three-quarters of those vessels are carrying Iranian oil, and the volume of crude in floating storage has risen by about 17 percent compared with the week before the Middle East conflict began.

Before the export halt, traders had expected Chinese refiners to increase shipments this month to capitalise on rising global fuel prices. Exports of gasoline, diesel, and jet fuel were projected to reach between 2.2 million and 2.3 million tons in March, up by roughly 300,000 to 400,000 tons from February estimates.