Europe is facing a jet fuel deficit in the fourth quarter despite increased supplies from distant producers, including South Korea, analysts and shipping data show.
South Korea is set to become a major source of jet fuel for Europe in September, with exports to the continent reaching their highest level in almost four years.
European imports of jet fuel from South Korea have averaged 129,000 barrels per day so far in September, according to commodities intelligence firm Kpler. The figure is the highest since October 2022. LSEG data showed similar volumes.
Europe has increased imports from countries including Nigeria, the United States and Canada since the outbreak of the Iran war more than six months ago. The conflict disrupted Middle Eastern supplies and cut off about half of Europe’s jet fuel imports.
With the region expected to remain short of jet fuel, imports are likely to continue, said James Noel-Beswick, head of commodities at market intelligence firm Sparta Commodities.
Jet fuel is one of the middle distillates, alongside diesel and gas oil. European diesel prices reached a record high this week, trading above Asian diesel markets.
The widening price difference between Asian and European markets is making it more profitable for traders to send fuel to Europe, Noel-Beswick said.
The increase in imports from South Korea also comes as fuel inventories remain low.
Stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) oil refining and storage hub fell to their lowest level in seven years in the week to September 10.
Asia is a swing supplier of jet fuel to Europe, with traders typically turning to the region when price differences between the two markets make exports profitable.
Kpler data showed that average monthly exports from Asia to Europe stood at 1.5 million barrels last year.
South Korea’s jet fuel production reached almost 13.89 million barrels in July, its highest level in seven years, while exports climbed to a three-and-a-half-year high, according to government data.
Higher refinery crude processing rates have contributed to the rise in output, while traders expect August crude runs to be higher than in July.
Provisional government data showed South Korea’s refinery runs reached 2.7 million barrels per day in July, up 16% from June.
Faridah Abdulkadiri
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