Europe faces Q4 jet fuel supply deficit even as South Korea becomes latest big supplier
South Korean shipments reached 129,000 barrels per day in September as low ARA stocks and a 510,000-barrel daily deficit tighten Europe’s market.
- Europe faces a projected fourth-quarter jet fuel deficit of 510,000 barrels per day, prompting increased reliance on far-flung suppliers including South Korea, which is boosting exports to a four-year high this September.
- Rising Middle Eastern tensions and the ongoing Iran war reduced Europe's jet fuel imports by roughly half over the past half-year. Consequently, independent stocks at the Amsterdam-Rotterdam-Antwerp hub hit their lowest levels in seven years in the week to September 10.
- September imports from South Korea surged to 129,000 barrels per day, the highest volume since October 2022. July refining output in South Korea hit a seven-year high of almost 13.89 million barrels, government data showed.
- Market intelligence firm Sparta Commodities' head of commodities James Noel-Beswick noted that wide price spreads between Asian and European benchmarks incentivize shipments from far-flung suppliers. European diesel markets remain firmer than those in Asia, fueling the arbitrage opportunity.
- Europe remains highly exposed to further supply disruption risks as Middle Eastern tensions persist. With the continent expected to remain short of jet fuel, experts anticipate imports from South Korea and other distant suppliers will continue sustaining European markets.
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Jornal Expresso
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Europe Faces Jet Fuel Shortage as Middle East Disruptions Hit Supplies
Europe is expected to face a 510,000-barrel-per-day jet-fuel deficit in the fourth quarter as disruptions to Middle Eastern supplies push buyers toward distant sources. South Korea has become a key supplier, with European imports from the country reaching their highest level since October 2022.
As of October, Europe will face a shortage of aviation fuel; there are no sufficient quantities even in the most remote areas of the world.
As the jet fuel supply squeeze deepens in Europe, the continent's stocks have fallen to their lowest level in seven years. With shipments from West Asia declining, Europe is turning to more distant suppliers such as Nigeria, the US, Canada, and South Korea. The growing supply gap could increase pressure on jet fuel prices and airline costs.
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