European jet crack reaches new highs, hitting the $100/b mark

The European physical jet crack surpassed $100/barrel on March 5 amid concerns about extreme tightness as the conflict in the Middle East continued to escalate, prompting traders to scramble to source supplies elsewhere for Europe.

The jet FOB FARAG vs Dated Brent physical crack rose to $102/b, having already reached an all-time high of $70.70/b on March 3. The crack provided a very strong incentive for refineries to begin maximizing jet in Europe.

Europe would face a supply crunch if the disruption of volumes from the Middle East continues. In 2025, Northwest Europe and the Mediterranean imported around 50% of their total jet fuel imports from the Persian Gulf, S&P Global Commodities at Sea data showed.

"It is a huge problem," one source close to the European jet market said. "March is not much of a problem, but April will be a problem."

Volumes continued to arrive from the Persian Gulf for March, given the travel times for volumes arriving by ship.

Voyages from the Persian Gulf to Northwest Europe and the Mediterranean via the Cape of Good Hope generally take between 38-42 days, while voyages through the Red Sea will take around 23-25 days for Northwest Europe and 16-19 days for the Mediterranean.

The US could potentially make up some volumes lost from the Middle East, but market participants remained skeptical. The arbitrage incentive from the US Gulf Coast to Northwest Europe was calculated at $25.14/b March 4, according to data from S&P Global CERA.

In addition, refineries may begin maximizing jet production, potentially leading to higher output on the back of specification changes in the diesel complex.

Diesel requires better cold-flow properties in winter, competing with jet fuel for refinery cuts, and it needs molecules that can withstand lower temperatures. With higher temperatures, diesel will likely compete less for molecules with the jet/kerosene fraction.

Amid tight supply, market participants awaited whether demand destruction or the release of strategic stocks could provide relief.