WHY DIDN’T AIRLINES RUN OUT OF FUEL?
The jet fuel market’s relatively small size, while making it prone to disruption, also made it easier for airlines and refiners to make adjustments to avert a widespread crisis of grounded planes.
The surging of jet fuel prices – which doubled to over US$230 (S$295) a barrel in early April from their pre-war level of about US$100, before falling to around US$141 on May 29 – encouraged refineries to produce more aviation fuel, albeit at the expense of other refined oil products, Mr Blas wrote.
For example, US refiners raised jet fuel’s share of refinery output from 10.5 per cent before the war to 12.7 per cent, he said. That means they are producing about 250,000 more barrels of jet fuel a day compared to a year ago, he added.
European refineries have also ramped up jet fuel production to maximum capacity, while European Union regulators approved the use of Jet A aviation fuel, sourced from other parts of the world, as an alternative to the Jet A-1 fuel currently used in Europe.
“Global refining has held up better than many expected. The US, Nigeria, India and Europe have all been able to increase jet fuel output – absorbing some of the supply gap left by Middle Eastern disruption,” said Mr Noel-Beswick.
“Notably, Asian refiners outside China have surprised to the upside – they secured more crude access than initially feared, keeping runs higher than the market anticipated.”
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