Iraq says it is starting jet fuel exports as Middle East prices rally

Iraq has begun jet fuel exports from domestic ports, which would be the first shipment since January 2023, as Middle East prices have surged this month.

Export operations have begun at a rate of 800 to 1,000 metric tons/day, Iraqi News Agency reported Oct. 8, citing Hamid Younis, undersecretary of the ministry of oil for refining affairs.

In January 2023, Iraq exported about 50,100 metric tons of jet fuel from the southern port of Khor Al-Zubair to Hamriyah Oil Terminal in the UAE emirate of Sharjah via Callisto, according to Kpler data. The China-flagged Callisto chemical/products tanker has frequently called at Hamriyah Free Zone Port in the past two years and was most recently at Khor Al-Zubair in May 2023 carrying uncategorized clean products, according to S&P Global Commodities at Sea.

Platts, part of S&P Global Commodity Insights, assessed jet fuel FOB Arab Gulf at $89.01/b on Oct. 8, the highest since Aug. 27 and extending a 14% rally since Oct. 1.

Jet fuel demand in the Middle East has picked up in recent weeks as more planes avoid flying over Israel and Lebanon, meaning more jet fuel will be needed for the extra miles flown, a spokesperson for the Al-Zour refinery said Sept. 24. Israel has since Sept. 17 shifted the focus of military action from Gaza, where it has been fighting Iran-backed Hamas militants since last October, to its northern border with Lebanon, stepping up strikes against Hezbollah targets. In response, Iran on Oct. 1 launched a missile attack on Israel.

More customers are buying aviation turbine kerosene, which is "in favor" because of the "current geopolitical situation", a spokesperson for Kuwait Integrated Petroleum Industries, which owns the Ak-Zour refinery, said.

Looking ahead to the fourth quarter, Commodity Insights projects jet fuel/kerosene demand in the region will climb 7.9% year on year. Middle East jet fuel/kerosene demand is projected to average 577,000 b/d in the fourth quarter, up 42,000 b/d year on year, according to Commodity Insights' monthly short-term outlook for Middle East refined products published Sept. 30.