China's diesel exports jumped last September by 262.3 percent year-on-year, reaching their highest level since February 2023, while exports of refined petroleum products overall rose 39.4 percent, with supplies from the Middle East and Russia declining due to the Iran war and other conflicts.
Chinese customs data showed on Sunday that exports of refined petroleum products, which include diesel, gasoline, jet fuel and marine fuel, rose 19 percent compared to August, to 7.16 million tons, continuing the strong growth recorded in the previous month.
Diesel exports reached 1.85 million tons, an annual increase of 262.3 percent, while gasoline, diesel and jet fuel exports combined rose to 4.41 million tons, an increase of 56 percent from September of last year, exceeding their 2025 monthly average of 3 million tons.
This increase comes after Beijing imposed restrictions on exports of refined products, including diesel, gasoline, and jet fuel, in mid-March, with the aim of protecting domestic supplies in light of the risks associated with developments in the Middle East, before easing the restrictions in mid-July.
In contrast, aviation fuel exports rose 16.7 percent year-on-year to 1.94 million tons in September, while gasoline exports fell 4.1 percent to 620 thousand tons.
Over the first nine months of the year, China's exports of refined petroleum products amounted to 41.4 million tons, a decrease of 3.7 percent compared to the same period last year. Diesel exports increased during the period by 31.6 percent to 6.68 million tons, while aviation fuel exports fell by 11 percent to 13.7 million tons, and gasoline exports fell by 51.9 percent to 3.04 million tons.
On the import side, China's imports of liquefied natural gas decreased 1.4 percent year on year to 5.61 million tons in September, while total imports during the first nine months reached 44.62 million tons, a decline of 5.8 percent from the corresponding period of the previous year.
The Governor of the Saudi Central Bank, Ayman Al-Sayyari, confirmed that the diverse energy infrastructure and logistics networks have enabled the Kingdom to continue oil supplies and regional trade, at a time when the global economy is facing the expanding repercussions of the conflict in the Middle East, extending from energy markets and shipping lanes to inflation, food and finance.
Al-Sayari said, in his speech before the International Monetary and Financial Affairs Committee of the International Monetary Fund, headed by Saudi Finance Minister Mohammed Al-Jadaan, during its meetings in Bangkok, that the Saudi economy continues to adapt to the repercussions of the conflict from a position of strength, supported by prudent policy frameworks and large financial and non-financial margins, in addition to a banking sector that enjoys strong levels of capital and liquidity. He stressed the Kingdom's continued efforts to support economic activity and maintain monetary and financial stability, while maintaining the sustainability of public finances.
Al-Sayyari stressed that energy security is not limited to the availability of supplies, but rather includes the ability to deliver them to markets reliably and at an appropriate cost, calling for continued investment in the various links of the energy chain, from production and refining to storage and diversification of transportation methods, and in all energy sources, including oil and gas, as this is an essential element of global economic and financial stability.
He explained that the initial repercussions of the conflict were concentrated in energy markets and major shipping lanes, before spreading to broader sectors, including trade, transportation, inflation, financing conditions, and investor confidence. He added that the pressures extended from oil and gas to refined petroleum products, especially transportation fuels, fertilizers and basic production inputs, exacerbating the risks of rising prices and putting pressure on food security and production.
He warned that redirecting supplies and withdrawing from stocks contributed to mitigating the immediate impact of the unrest, but reduced the ability to cope with additional outages, noting that continued pressures may weaken global growth prospects in the medium term.
Saudi banking sector
Speaking about the ability of the Saudi economy to confront shocks, Al-Sayyari pointed out that the banking sector enjoys strong capitalization and high liquidity, and that financial safety indicators are still among the strongest in the region. He added that asset quality has improved, and stress tests confirm the banking system's ability to withstand severe shocks.
Al-Sayyari attributed the Kingdom's ability to maintain local stability to decades of prudent economic management, risk management and strategic investment, in addition to the diversification of energy infrastructure and logistics services, which contributed to supporting the continued supply of oil and regional trade, and mitigating the impact of the global energy shock.
He stressed that Saudi Arabia continues to adapt its response to developments in the conflict to support economic activity and maintain monetary and financial stability, while maintaining room to move in the face of any additional developments, without disturbing the sustainability of public finances.
“Vision 2030” and promoting growth
The Governor of the Saudi Central Bank pointed out that “Vision 2030”, as it enters its tenth year, has strengthened the economic foundations of the Kingdom by expanding the non-oil economy, increasing private sector participation, and strengthening institutions and the ability to implement reforms.
He stressed the Kingdom's continued commitment to reforms that raise productivity and expand private investment opportunities, while improving spending efficiency and maintaining financial sustainability. He added that the next phase will witness continued efforts to diversify the economy, deepen financial markets, and develop human capital, in addition to developing infrastructure and institutional capabilities to support sustainable and comprehensive growth.
A call to activate IMF reforms
At the level of international cooperation, Al-Sayyari called on the International Monetary Fund to focus on the actual implementation of the institutional reforms whose review was recently completed, including economic oversight, program design and conditions, financial sector assessments, and the debt sustainability framework for low-income countries.
He stressed the need for the Fund's programs to take into account countries' circumstances, needs, and ability to implement reforms, and for the conditions to focus on the measures necessary for the success of the programs, while strengthening coordination between oversight, financing, and technical assistance. He also stressed the importance of addressing unsustainable debts in an organized and timely manner, and enhancing cooperation among creditors.
Al-Sayyari renewed Saudi Arabia’s support for the technical assistance provided by the Fund, including the Kingdom’s pledge to provide $279 million, in addition to its support for the Fund’s regional office in Riyadh.
The speech also touched on the risks posed by fluctuations in capital flows, the rise in sovereign bond yields, and the growing role of non-banking financial institutions, in addition to the repercussions of artificial intelligence and stable currencies on productivity and financial stability, stressing the importance of developing analysis and oversight to keep pace with these risks.
This week, the attention of global currency and bond markets is turning to indicators of economic activity in major economies and inflation data in Britain, Canada, and Japan. In search of new signals on the path of interest rates, at a time when pressure on central banks is increasing due to rising energy prices and continuing inflation, in conjunction with growing fears about the cost of financing huge investments in artificial intelligence.
Preliminary October PMIs, due for release on Friday in the United States, the Eurozone and Britain, are particularly important in assessing the strength of economic activity and demand trends, and may provide additional signals on the timing and size of interest increases. Markets are also awaiting inflation data in Britain and Canada, growth and economic activity figures in China, in addition to the decisions of a number of Asian central banks.
US interest bets are being tested
In the United States, purchasing managers' indexes, unemployment claims data, and the University of Michigan Consumer Confidence Index will help assess the strength of the economy, after recent data showed higher-than-expected inflation and consistent economic activity.
Despite this, the markets do not expect a new rate hike at the Federal Reserve meeting scheduled for October 28, as contracts are pricing in a probability that does not exceed 15 percent for an increase of a quarter of a percentage point, according to “LSEG” data included in the “Wall Street Journal” report. In contrast, the December interest rate increase is now fully priced in the markets.
US Treasury bond yields remain in the spotlight, having retreated from their recent high levels as concerns mount about the sustainability of debt-financed investments in artificial intelligence. However, continued inflationary pressures and rising energy prices may put pressure on returns during the coming period.
The Wall Street Journal quoted interest rate strategist at ING, Badhraik Garvey, as saying that strong labor market data, retail sales, and rising producer price inflation may push markets to reprice yields toward higher levels in the coming weeks.
Europe between inflation and tightening expectations
In the euro zone, attention is focused on indicators of industrial and service activity in France, Germany and the entire region, in addition to data on German investor confidence and producer price inflation. The results may help determine whether the recent improvement in economic sentiment will continue or decline.
As for Britain, markets are awaiting labor market data, inflation, retail sales, and activity indicators, amid growing expectations that the Bank of England will raise interest rates at its scheduled meeting on November 5. Markets are pricing in a 93 percent chance of an increase of a quarter of a percentage point, according to data reported in the report.
These bets reflect fears of continued price pressures, although some economists believe that the markets may be overestimating the extent of the expected monetary tightening.
In Canada, consumer price data for September will be released, which will affect monetary policy expectations after data showed weakness in the labor market. Markets are still giving limited probability of a rate hike at the October 28 meeting, with an increase priced in at the December meeting.
China and Asia face the equation of growth and prices
In Asia, China's third-quarter GDP data, along with industrial production, retail sales and investment, top the list of awaited indicators on Monday. These numbers will help assess the discrepancy between strong exports and weak domestic demand, at a time when the electronics sector is benefiting from demand related to artificial intelligence.
DBS estimates included in the report indicate that Chinese industrial production may rise by 5.3 percent on an annual basis in September, compared to a slowdown in retail sales growth to 0.3 percent, with continuing pressures on consumption.
The Chinese central bank is expected to keep the reference lending rate unchanged, while continuing to rely on targeted support measures for economic activity.
Japan also releases trade and inflation data, which will influence the outlook for the Bank of Japan's monetary policy path. Economists at ING expect general and core inflation to rise to 2.1 percent on an annual basis, which may support expectations for continued normalization of monetary policy.
The banks of South Korea, Indonesia and the Philippines are meeting this week to make decisions on interest rates, amid different growth and inflation conditions between them. While most economists expect interest rates to be held in South Korea, the risks of rising fuel prices and weak local currencies remain factors weighing on the decisions of central banks in Indonesia and the Philippines.
In New Zealand, third-quarter inflation data may reinforce expectations for a rate hike at the October 28 meeting, while in Australia, markets await statements from the Deputy Governor of the Central Bank regarding the next step for monetary policy.
Energy and finance double the importance of data
This data comes at a time when inflation risks intertwine with concerns about financing, as higher oil prices can raise costs for companies and consumers and complicate the task of central banks, while higher yields increase the cost of borrowing for companies and governments.
The results of economic activity indicators will be decisive in determining whether the strength of demand will give central banks room to continue tightening, or whether the slowdown in activity will limit their ability to raise interest rates despite price pressures. Bond markets will also monitor any signs of changing interest expectations, given the sensitivity of returns to inflation, investment spending and debt risks.
