USGC distillates prices jump to multiyear highs on European demand

US jet fuel and ultra low sulfur diesel fuel prices rallied again to fresh multiyear highs on March 4 on prompt demand for waterborne exports as the US war with Iran crimps Middle East supply.

Platts, part of S&P Global Energy, assessed USGC jet for Colonial Pipeline's 16th cycle at plus 19.25 cents/gal on March 4, up 24.25 cents/gal day over day, which is the highest differential since Feb. 24, 2023, when the US benchmark was assessed at plus 25.00 cents/gal.

On an outright basis, the grade rose by 34.94 cents/gal to $3.4863/gal on March 4, the highest since Jan. 27, 2023, when the grade stood at $3.5002/gal.

"Exports are going insane for jet," a US jet trader said March 3. "Hearing Europe rally is outpacing the one here, so they are calling for as much jet and diesel as they can get from the US."

In 2025, Persian Gulf exporters supplied around one-fifth of the diesel that arrived in the EU and UK, and around half the jet fuel, S&P Global Commodities at Sea data showed.

US Gulf Coast ULSD for Colonial Pipeline's 15th cycle was assessed flat to NYMEX April ULSD futures on March 4, up by 11 cents/gal day over day to the highest since March 28, 2023, when the assessment stood at plus 0.95 cent/gal.

On an outright basis, the grade was assessed at $3.2938/gal on March 4, up by 21.69 cents/gal day over day to the highest level since Sept. 15, 2023, when it was assessed at $330.34/gal.

So far in March, total US middle distillate exports to Northwest Europe are averaging 160,000 b/d, with 4.8 million barrels discharged to date. In February, exports reached 327,000 b/d, down from 420,000 b/d in January, according to CAS data.

In February, the Netherlands and the UK were the top destinations for imports into Europe, receiving 123,400 b/d and 93,100 b/d, respectively, according to the data.

Arbitrage opportunities limited

Arbitrage opportunities could be made difficult to work amid rising freight costs and higher risk premiums for shipments, which is limiting sell-side activity, according to market sources March 4.

"I have not seen any offers in Europe, so hard to say the USGC to Europe jet arbitrage is open," a second US jet trader said March 4.

Waterborne jet for export was assessed at USGC Colonial Pipeline plus 4.50 cents/gal on March 4. That is elevated week over week by 2 cents/gal for both US specification Jet A cargoes and International grade Jet A-1 cargoes.

The clean tanker freight rate from the Medium Range USGC to the Mediterranean was assessed at $92.61/mt on March 4, the highest since April 17, 2022, when it stood at $94.95/mt. Similar voyages to Northwest Europe were assessed at $85.04/mt, the highest since April 11, 2022, when it was assessed $86.72/mt.

Waterborne ULSD cargoes for export rose in tandem by 3.00 cents/gal day over day to premiums against the Colonial Pipeline price of 4.00 cents/gal for US specification barrels, plus 4.50 cents/gal for S10 Brazilian grade cargoes and plus 5.50 cents/gal for Europe EN590 grade.

"This is the most insane jet market of our lifetime," a second US jet trader said March 4. "I can see where jet is bid in Europe, but the offer will have to come in way above that."

USAC supply pressured

US Atlantic Coast supply, which is largely sourced from Texas and Louisiana refineries, could also come under pressure amid increased international demand.

US Atlantic Coast jet for Buckeye Pipeline was assessed at NYMEX April ULSD plus 30.25 cents/gal on March 4, up by 54.50 cents/gal since the end of last week. USAC ULSD coming off Colonial Pipeline's Line 3 was assessed at April futures plus 7.25 cents/gal, unchanged since Feb. 27.

Prompt NYMEX ULSD rose to $3.2938/gal on March 4, up by 10.69 cents/gal day over day and the highest since Sept. 29, 2023, when it settled at $3.3622/gal. That was estimated at a premium of 29.80 cents/gal to forward May futures, indicating prompt demand is outstripping available supply.