Asian and European jet fuel prices spike on supply risk

View Full Transcript

 

Spot jet fuel prices in Asia and Europe have more than doubled after conflict erupted in the Middle East, as geopolitical uncertainty pushed crude and oil product prices higher.

Aviation fuel prices in Asia and Europe surged on the back of the latest conflict, with the Singapore assessment logging an all-time high.

Given Europe’s natural shortfall of aviation fuel, it relies heavily on imports from the Middle East, and disrupted outflows are squeezing an already tight market.

Asia imports much less jet fuel from the Middle East, but depends heavily on crude oil feedstock from the region.

Traders anticipate Asian refineries to lower refined product output on the back of lower crude oil availability, thereby tightening oil product supplies.

China has temporarily halted fresh export permits for refined products, with one refinery source saying April exports will fall to a minimum, and Chinese firms are set to stop exporting jet fuel altogether.

While the fighting may have disrupted routes via Middle Eastern transit hubs, there has been a rise in long-haul direct flights between Asia and Europe, suggesting that travelers may be changing their plans rather than canceling them.