Part of ADI Analytics’ ongoing coverage of the implications of the Iran conflict across oil & gas, LNG, refined products, and chemicals.
Jet fuel markets experienced a sharp and localized dislocation following recent geopolitical disruptions, with price movements far exceeding changes in crude benchmarks. The episode has highlighted how exposed aviation fuel economics remain to refining capacity, logistics, and policy structure, even in a relatively stable crude environment.
- Jet fuel prices moved sharply higher relative to crude, reflecting downstream constraints rather than feedstock scarcity.
U.S. jet fuel prices rose from roughly $105/bbl to $153-$168/bbl ($2.50/gal to $3.65–$3.99/gal) within weeks, while Northwest Europe jet fuel prices increased from around $100/bbl to as high as $170–$175/bbl ($2.38/gal to $4.05-$4.17/gal). These moves materially outpaced Brent and point to tight middle‑distillate balances, refinery utilization limits, and constrained logistics rather than crude availability alone. - Asia Pacific and Europe saw stress first, with the initial impact concentrated in airline margins.
Price pressure emerged earliest in Asia Pacific and then in Europe, where reliance on imported jet fuel and exposure to transit chokepoints increased vulnerability. Exhibit 1. below shows the share of Middle East in European jet fuel imports. Airlines responded by raising fuel surcharges rather than immediately reducing capacity, indicating that margin compression preceded visible demand destruction at the passenger level.
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