We show that steady-state catalytic conversion in nanoporous materials can occur in a quasi-counter-diffusion mode with the reactant (product) concentration strongly decaying (growing) into the pore, but also with oscillations in the total concentration. These oscillations reflect the response of the fluid to the transition from an extended to a confined environment near the pore opening. We focus on the regime of strongly inhibited transport in narrow pores corresponding to single-file diffusion. Here, limited penetration of the reactant into the pores and the associated low reaction yield is impacted by strong spatial correlations induced by both reaction (non-equilibrium correlations) and also by intermolecular interactions (thermodynamic correlations). We develop a generalized hydrodynamic formulation to effectively describe inhibited transport accounting for the effect of these correlations, and incorporate this description of transport into appropriate reaction-diffusion equations. These equations accurately describe both shorter-range concentration oscillations near the pore opening and the longer-range mesoscale variation of concentration profiles in the pore (and thus also describe reaction yield). Success of the analytic theory is validated by comparison with a precise kinetic Monte Carlo simulation of an appropriate molecular-level stochastic reaction-diffusion model. This work elucidates unconventional chemical kinetics in interacting confined systems.