Typically, it's the release of stress hormones, particularly cortisol and adrenaline, which causes the body to produce additional blood glucose in response to exercise.
If the exercise is maintained long enough, insulin receptors within the cells in the body migrate to the surface of the cells where they can pull that glucose out of the bloodstream for fuel, or the production of glycogen or triglycerides.
What tends to happen as a result is that bg levels rise initially during exercise, then fall if the exercise is maintained and potentially for many hours afterwards.
Regular exercise keeps those receptors doing their jobs, which can significantly reduce insulin resistance.
All the best,
fergus