Europe is projected to experience a fourth‑quarter jet fuel deficit of about 510,000 barrels per day, according to consultancy Energy Aspects. The shortfall comes despite record‑high diesel prices in the region and growing tensions in the Middle East that have already cut off roughly half of Europe’s traditional jet fuel imports.
South Korea Steps In as Major Supplier
South Korea has emerged as the latest large source of jet fuel for Europe. Shipping data from commodities‑intelligence firm Kpler shows imports from the Asian nation reaching 129,000 barrels per day in September – the highest level since October 2022. LSEG data corroborates these figures.
Government statistics reveal that South Korean jet fuel output in July hit a seven‑year high of nearly 13.89 million barrels, while exports rose to a three‑and‑a‑half‑year peak. The increase follows higher refinery crude‑processing rates, with provisional data indicating July runs of 2.7 million barrels per day, up 16 % from June.
Why Europe Is Vulnerable
Since the outbreak of the Iran war over six months ago, Europe has turned to a broader set of suppliers, including Nigeria, the United States and Canada, to replace Middle‑Eastern deliveries that were abruptly curtailed. However, inventories remain low. Stocks at the Amsterdam‑Rotterdam‑Antwerp (ARA) hub fell to their lowest level in seven years during the week to September 10.
Traders cite the widening price spread between Asian and European benchmarks as a key driver of the current arbitrage opportunity. “The spread makes it more profitable to export barrels into Europe,” said James Noel‑Beswick, head of commodities at market‑intelligence firm Sparta Commodities.
Regional Supply Outlook
Energy Aspects forecasts a modest surplus of 18,000 barrels per day in the United States and 419,000 barrels per day in the Asia‑Pacific region for the same period. The third‑quarter trend mirrors the fourth‑quarter outlook, indicating that Europe’s supply challenges are likely to persist.
Asia has traditionally acted as a swing supplier of jet fuel to Europe, with average monthly exports of about 1.5 million barrels last year, according to Kpler. The current surge from South Korea underscores the continent’s reliance on flexible, profit‑driven trade flows amid geopolitical uncertainty.
Implications for Airlines and Travelers
Airlines operating in Europe may face higher fuel costs if the deficit deepens, potentially leading to increased ticket prices for passengers. Industry observers note that the tight market could also pressure airlines to secure longer‑term contracts with reliable suppliers, such as South Korea, to hedge against future disruptions.
While the situation remains fluid, the combination of low regional inventories, ongoing Middle‑Eastern tensions, and strong Asian export pricing suggests that Europe’s jet fuel market will stay under pressure through the end of the year.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
