Europe set to see strong jet inflows from East of Suez through April

European jet fuel inflows from East of Suez were expected to stay largely unchanged on the month at 1.5 million mt in April, data from S&P Global Commodities at Sea showed April 12.

The sustained inflows come as cargoes rerouted around the Cape of Good Hope amid persisting tensions in the Red Sea arrive in Europe despite narrowing arbitrage and high freight costs.

Additionally, import volumes in April could be higher than March levels as cargoes continue arriving from the East of Suez, said a source. "There seems to be quite a bit that arrived late-March/early-April so perhaps some of it is just a function of cargoes that were previously arriving in March slipping into April," the source added.

Reflecting the lull in the market, the Platts-assessed CIF Northwest Europe outright jet price has remained relatively steady so far in April, and was most recently assessed at $870.5/mt on April 11, showed S&P Global data.

Sources have said that the market is awaiting summer demand to make a dent in the oversupplied European jet market, which might also explain the low levels of activity seen lately in the Platts jet fuel Market on Close assessment process.

Cargoes reroute around the Cape

About 1.1 million mt of jet fuel is set to arrive in Europe via the Cape of Good Hope, out of a total of 1.5 million mt, up 14% from March, according to CAS data retrieved on April 12.

Jet fuel cargoes first began diverting around the Cape of Good Hope in February 2024 after the Houthis began attacking vessels in the Red Sea in retaliation to the Israel-Gaza conflict.

The diversion of cargoes around the Cape of Good Hope might continue well into the year, based on how the conflict in the Red Sea progresses, said market sources, with only a few oil and shipping companies still taking the Red Sea route.

Sources also said that there are "plenty of arrivals coming from the Arab Gulf and the Far East."

CAS data showed that the bulk of imports are coming from the UAE, Kuwait, Saudi Arabia and India at 103,900 mt, 544,100 mt, 312,500 mt and 430,00 mt, respectively. While the UAE’s exports are down 66% on the month, volumes from Saudi Arabia and India have gone up by 105% and 95%, and those from Kuwait have remained largely unchanged on the month, rising just 5.8%.

While inflows from East Asia picked up in March at around 200,000 mt from China and South Korea, after a marked absence of flows in January and February, no cargoes have been seen on the water so far in April.

Flows head for NWE

The majority of jet flows to Europe are expected to head to Northwest Europe at 1.5 million mt, up from 1.3 million mt in March.

Key importers are the UK at 499,200 mt, down 17% from March, France at 317,400 mt, up 26% on the month and Netherlands at 616,100 mt, up 49% from volumes seen the previous month.

In the Mediterranean, there has been a marked absence of inflows so far in April. March saw imports of 195,000 mt after a winter slowdown as low demand in the Mediterranean during winter months caused the region to turn into a net exporter.

Demand in Europe is gradually picking up as summer approaches, with aviation demand rising every month. "If this trend continues, we might see the jet market strengthening soon," said a market source.

Passenger statistics from Heathrow for February 2024 show the total number of passengers at 5,795,895, a rise of 11.5% from the same period in 2023.

Additionally, the International Air Transport Association (IATA) released data for February 2024 global passenger demand, which noted that total demand, measured in revenue passenger kilometers (RPKs), was up 21.5% compared with February 2023.