Jet fuel demand remains low in Puerto Rico, still reeling from 2017 hurricanes

The historic hurricane season of 2017 left the island of Puerto Rico in shambles, its people in need of humanitarian aid and its infrastructure in need of rebuilding.

Now, a little more than half a year since two massive storms ravaged the island, population changes and altered tourist patterns suggest that Puerto Rico's jet fuel demand may never return to pre-storm levels.

First came Hurricane Irma on September 7, 2017. The eye of that Category 5 storm passed just to the north of the island, leaving many Puerto Ricans without power.

But the major blow was yet to come.

Hurricane Maria was not quite as powerful as Irma in terms of official storm rating, but it did incredible damage with a direct hit to the island on September 20.

Puerto Rico and its people still have not recovered from the devastation caused by the storms, and many Puerto Ricans have chosen to leave their homes rather than face future storms. The Center for Puerto Rican Studies at the City University of New York predicted that Puerto Rico may lose up to 14% of its population, more than 470,000 residents, through 2019.

The population loss, coupled with decreased tourism numbers after the storms, has necessarily reduced jet fuel demand considerably.

US Customs data showed the island averaged 2 million barrels of jet fuel imported over every six-month period prior to February 2017. That jumped to a healthy 2.6 million barrels during the six months prior to the storms.

However, in the six months since the devastation, Puerto Rico has imported just 1.58 million barrels of jet fuel.

Not only are residents electing to leave, the normally robust tourist trade was damaged. The Puerto Rico Tourism Company estimated that approximately 125 hotels and more than 4,000 restaurants were back in business by the end of February. But the tourist trade won't fully recover until the rest of the island is completely cleaned up, and it is unclear when that will happen.

The island's jet fuel needs are primarily served by monthly term contracts from Atlantic Trading and Marketing, Total and Trafigura's Puma Energy Caribe. Those were supplemented by single cargoes from BP and Rubis Eastern Caribbean in the months after the storm. The US Energy Information Administration reported 175,000 jet barrels exported to Puerto Rico in November, the first time that has happened since October 2010, according to EIA.

Sources say the flight totals, and thus the jet fuel demand, might never get back to pre-storm levels.

"I don't know about the total, but we're generally averaging between 10-20 flights out per day, depending on the day," said a Southwest Airlines operations source. "Airport fuel infrastructure was relatively untouched, so even though the island is a wreck, it has been business as usual from an operations perspective. But yes, overall I'm sure the total flight counts have dropped."

Puerto Ricans are hoping more recovery work can be completed before the 2018 hurricane season, which begins in June and runs through November. Colorado State University forecasters have predicted a slightly above-average season this year, with 14 named storms. Seven of those are expected to become hurricanes, and three could be major storms.