USGC ULSD export prices rise to all-time high, jet export prices track higher

Export prices for US Gulf Coast distillates are on the rise, supported by robust arbitrage incentives and surging export volumes.

The ULSD USGC waterborne spread to the benchmark Gulf Coast pipe surged by 5.75 cents/gal to 14.25 cents/gal, the highest level since Platts, part of S&P Global Energy, began publishing the assessment in January 2010. On an outright basis, the assessment dipped 1.95 cents/gal to $4.1793/gal, tracking the lower NYMEX May ULSD futures contract.

According to the latest S&P Global Energy ArbFlow report from April 1, the USGC-Europe ULSD arbitrage is currently open by $5.57/b, remaining above the $1/b threshold since March 17.

Meanwhile, jet fuel exports have seen an even stronger incentive, with the USGC-Europe jet fuel arbitrage open at $16.02/b on April 1 and as high as $22.42/b on March 26, according to the data.

Current market conditions, primarily the US-Iran war, have led to a significant increase in USGC distillate exports. S&P Global Commodities at Sea data showed that 46.5 million barrels of diesel were exported from the USGC in March, a 14.6-million-barrel jump from the previous month and a substantial increase from the 27.2 million barrels exported in March last year.

USGC exports to Europe totaled 11.5 million barrels in March, with the Netherlands receiving the largest share at 5.2 million barrels, followed by the UK with 4.3 million barrels. South America remains a key destination for USGC diesel exports, totaling 12.6 million barrels in March. Ecuador was the top destination in the region, taking in 3 million barrels, while Brazil received 2.4 million barrels.

The USGC Jet waterborne assessment remained unchanged on the day at an 8 cents/gal premium to Gulf Coast pipe, its highest level since September 2024.

"Jet pricing has been bullish the past couple of days," remarked one distillates trader. "Jet is crazy everywhere – [US Jet] is just catching up."

The rising tide for USGC ULSD waterborne premiums lifted the other ULSD export assessments, with Brazilian S10 and European EN590 spec diesel settling at 14.75 cents/gal and 15.75 cents/gal, respectively, above the benchmark Gulf Coast ULSD prompt pipeline assessment.