SINGAPORE: Chinese refiners have halted oil product exports for October as Beijing focuses on rebuilding domestic fuel inventories, four people briefed on the matter said, potentially tightening global markets already constrained by supply disruptions.

China began a week-long holiday on October 1 without giving major refiners approval to export fuel products in October to destinations other than Hong Kong and Macau, the sources said.

It remains unclear whether Beijing will allow exports to resume after the holiday ends on October 7. The decision could depend on domestic fuel inventories and refining output, the sources said.

Beijing restricted fuel exports in March after the Iran war disrupted Middle Eastern crude supplies. It relaxed those restrictions in July and has since managed monthly shipments of diesel, gasoline, and jet fuel.

China's National Development and Reform Commission did not immediately respond to a request for comment during the public holiday.

Global fuel markets have been dealing with supply losses resulting from the Iran war and Ukrainian attacks on Russian refining infrastructure. China's move could push prices in some countries to new highs.

"It highlights that the government's focus remains domestic supply security. International markets are an afterthought," said Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies.

"Although refiners would like to capitalize on strong export margins, and China theoretically has the capacity to ramp up refining runs and exports, unless domestic stocks are adequate, exports will be limited," she said.

October-November price spreads for Asian diesel swaps reached a two-week high on expectations that Chinese export supplies would be absent.

State oil company PetroChina canceled a handful of gasoline and jet fuel shipments planned for October on September 30, three sources said. Most of those shipments had been committed during the previous two weeks.

Privately controlled Zhejiang Petrochemical Corp did not schedule any oil product shipments during the holiday week, another source said. Neither company immediately responded to requests for comment.

Uncertainty over crude availability and declining domestic fuel inventories prompted Beijing to focus on supply security, trade sources said. Fuel exports are contingent on local inventories returning to pre-war levels.

"Our analysis shows commercial gasoil and diesel inventories sitting around 20 million barrels below that threshold, with gasoline roughly nine million barrels short, so a pause on those products was likely," said Zameer Yusof, a senior manager for clean oil products at Kpler.

Trade estimates showed 1.4 million metric tons of diesel, 500,000 tons of gasoline and at least two million tons of jet fuel, including bonded volumes to Hong Kong and Macau, were loaded in September, down from August.

Singapore, Malaysia, Australia, Vietnam, Bangladesh and the Philippines were among the leading destinations for Chinese fuel exports in September, according to Kpler and LSEG data.

South Korean refiners could replace some of the lost supply, although existing term commitments would constrain their spot volumes, Yusof said.