…As market rebalances on higher production, imports
Concerns over a major deficit in the global jet fuel market have eased significantly ahead of the peak summer travel season, thanks to a surge in refinery production and booming export volumes, the International Energy Agency (IEA) revealed in its latest monthly report on Wednesday.
“Concerns over jet fuel supply shortfalls ahead of the peak summer travel season have significantly eased in recent weeks,” the IEA stated.
Record Production and Export Surges
The supply rebound began building momentum early in the year. In March, refineries in the United States and Europe produced over 2 million barrels per day (bpd) and 1.3 million bpd of jet fuel, respectively, with output climbing even higher through April and May.
Taking advantage of record-high production levels and above-average domestic stockpiles, the U.S. ramped up its jet fuel exports to Europe to historic highs.
Nigeria has also emerged as a critical player in stabilizing the European market. According to data from tracking firm Kpler, European imports of Nigerian jet fuel reached 127,000 bpd so far in June, closely rivaling the 136,000 bpd supplied by the U.S.
European Refining Rebound
Within Europe, attractive refining margins for middle distillates incentivized increased processing across several nations, including Italy, Norway, and Denmark. Supply was further bolstered as refineries in Poland, Belgium, and Germany resumed full operations following completed maintenance schedules.
Diesel Output Unaffected
Crucially, the IEA pointed out that the aggressive ramp-up in aviation fuel did not come at the expense of diesel manufacturing. Instead, refineries managed the balance by sourcing extra low-sulphur feedstocks to feed their hydrocracking units.
“Jet fuel continues to price high enough to sustain its share of the overall product output,” the IEA noted, adding that the jet fuel-to-diesel price gap has narrowed close to pre-conflict levels, even as diesel margins remain robust at nearly $40 a barrel.
