Jet fuel demand is taking off, a key finding from ADI’s recent long-term forecast. Other fuels face a turbulent market today as gasoline demand is weak and diesel shows modest growth. On the contrary, jet fuel is a bright spot in the energy sector. The aviation sector’s recovery is the primary driver behind this surge. Demand for jet fuel is expected to finally reach pre-pandemic levels by 2025 or 2026 and continue to climb through 2045.
While new, more efficient aircraft and the growing interest in sustainable aviation fuel (SAF) could be headwinds, the latter is a major focus of our biweekly SAF Tracker newsletter, they will be offset by a rapid increase in air travel. Commodities trader Vitol notes that as people become wealthier and fly more, jet fuel’s share of total fuel demand is projected to rise from 7% to 10% by 2040.
ADI Plus subscribers can access our detailed jet fuel demand forecasts by region, providing both short-term outlooks and long-term projections extending up to 2045. A PDF summary and data file are also available for ADI Plus subscribers based on their access levels.
Drivers of jet fuel demand growth
Global jet fuel demand will continue its recovery toward pre-pandemic levels with significant regional variations. Factors including economic and population growth, infrastructure expansion, evolving consumer behavior, and aircraft energy efficiency impact jet fuel demand. Economic and population growth will drive the demand for commercial and cargo flights which drives jet fuel demand. Additionally, as infrastructure expands and consumer behavior evolves driven by rising living standards in emerging economies, aviation demand will grow which drives jet fuel demand growth.
On the flip side, rising aircraft energy efficiency will limit the jet fuel demand growth. Airbus recently indicated that its new airplane, planned to enter service in the next 10 to 15 years will be 20 to 30% more fuel efficient than the current A320neo models. Introduced in the mid-2010s, the A320neo models were ~15% more fuel efficient than their predecessors. Boeing’s current fourth generation of 737s are also ~15% more fuel efficient than the prior generation. Furthermore, growing sustainability concerns and of sustainable aviation fuel (SAF) adoption also negatively impact jet fuel demand growth.
The rest of this article is available to ADI Plus Essential subscribers. Enhanced subscribers also get a downloadable PDF of ADI’s global jet fuel demand forecasts segmented by region through 2045. For Enterprise subscribers, an additional data file is also available.
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