SAF prices rise as jet fuel markets tighten amid Middle East war

Sustainable aviation fuel prices rose during the week ended March 4 as global jet fuel markets tightened amid the war in the Middle East, with US West Coast hubs seeing notable price gains, while in California, SAF reached an all-time high, industry sources and market data showed.

Platts-assessed SAF outright prices in California rose 132.88 cents to 885.23 cents/gallon over Feb. 25 and March 4, marking a historical high. The SAF 30/70 blend, representing 30% SAF and 70% conventional jet fuel, increased to 666.80 cents/gallon over the same period. Meanwhile, SAF (HEFA-SPK) CIF NWE Cargo also gained, rising 112.27 cents to 755.40 cents/gallon during this timeframe. Platts is part of S&P Global Energy.

SAF, which typically trades at a premium to conventional jet fuel, is being influenced by sharp moves in the jet fuel complex, as spot values across major US hubs reflect both geopolitical risk premiums and regional supply constraints.

"The SAF increase is because jet is the most affected product from the closure of the Strait of Hormuz," a market source said. "SAF is reacting to steep increases in jet prices everywhere."

Oil flows and tanker traffic through the Strait of Hormuz remain largely disrupted, despite a US insurance pledge, as security threats continue to slow ship movements. Analysts say the ongoing conflict is boosting distillate cracks in multiple hubs, particularly in Europe, and that continued tensions are likely to keep market volatility and elevated fuel prices in place.

On the US West Coast, the outright jet fuel price climbed 125.54 cents to $3.5869/gal on March 4, the highest since Feb. 15, 2024, when it was at $3.2137/gal. Combined with SAF's structural cost premium, these moves are sustaining elevated SAF price levels relative to conventional jet. The SAF premium in California increased 12.98 cents/gallon, or 6.2%, from Feb. 25 to March 4.

Over the past weeks, SAF prices continued to outpace conventional jet fuel, tracking broad jet market tightness. Jet fuel prices rose week over week across multiple US hubs, including the West Coast, supporting SAF premiums. Pricing indexes show that both SAF and jet climbed, reflecting persistent supply constraints, refinery disruptions, and market risk premiums tied to the Middle East conflict.