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United States jet fuel production rose to record highs after prices doubled in March following the closure of the Strait of Hormuz on February 28. The spike in prices stems from higher crude oil costs and acute supply concerns in Europe and Asia, two regions that previously relied heavily on the Persian Gulf for their jet fuel imports.
According to the US Energy Information Administration, a substantial portion of this surging US output is currently headed for international markets, while domestic stockpiles continue to hold above historical averages. "Despite increased export demand, jet fuel inventories in the United States have remained above average," the report detailed. "US jet fuel inventories as of May 29 totaled 45 million barrels, 7% above the 2021-2025 average," the US Energy Information Administration confirmed. Data indicates that domestic refining activity accelerated immediately after the geopolitical choke point closed. At that time, the four-week average for US jet fuel production stood at 1.7 million barrels per day (b/d). "In the week ending May 1, the four-week average estimate of U.S. jet fuel production surpassed 2.0 million b/d for the first time on record," the US Energy Information Administration stated. This historic expansion in volume reflects a combination of above-average refinery runs and calculated operational shifts by operators looking to maximize their jet fuel yields. Refiners adjusted their facilities specifically to capitalize on the exceptional profit margins available in the wake of the disruption. "From March through May, U.S. Gulf Coast Jet Fuel Spot prices averaged USD 3.91 per gallon (gal), about double the price at the start of the year and higher than the regional spot prices for both gasoline and diesel fuel," the report noted. The financial incentive for refiners remains clear in the margin data from the US Gulf Coast. The jet fuel crack spread, which measures the profitability of refining crude oil into aviation fuel, averaged USD 1.25/gal during the March-to-May period, up significantly from USD 0.42/gal at the beginning of the year. Other global trading hubs, including Singapore and the Amsterdam-Rotterdam-Antwerp region, experienced similar trends, with prices doubling and crack spreads widening. International price dynamics directly altered global trade flows during the spring. "Jet fuel prices in Europe and Asia traded at significant premiums to the US Gulf Coast in March and April, attracting sources to replace imports from the Middle East," the report stated. As a direct result of these premiums, transactional trade data from US Customs and Border Protection shows that US jet fuel exports climbed to record highs throughout April and May. The surge in cross-border shipments eventually stabilized international markets. Prices in Europe and Asia cooled from their April peaks and moved closer to US Gulf Coast benchmarks as global shortage anxieties subsided. (ANI)
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