Europe expects Q4 jet-fuel deficit of 510,000 bpd
Europe expects Q4 jet-fuel deficit of 510,000 bpd
Anonymous
Key Points
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Independent stocks at the Amsterdam-Rotterdam-Antwerp refining and storage hub fell to their lowest level in seven years in the week ending Sept. 10, underscoring the severity of Europe’s inventory position.
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South Korean jet-fuel production reached nearly 13.89 million barrels in July, a seven-year high, while the country’s jet-fuel exports rose to their highest level in three and a half years.
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The shortage is part of broader middle-distillate tightness: European diesel prices reached a record high and remained above Asian diesel prices, increasing the incentive to redirect cargoes toward Europe.
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Traders commonly use Asia as a swing supply source for Europe when the regional arbitrage window opens; Kpler data showed average monthly Asian-to-European exports of about 1.5 million barrels last year.
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James Noel-Beswick of Sparta Commodities said Europe’s imports are likely to continue because the continent is expected to remain short of jet fuel, with the widening Asian-European benchmark spread making those exports more profitable.
Europe is heading into the fourth quarter facing a severe jet-fuel shortage of 510,000 barrels per day, Energy Aspects forecasts. Middle Eastern supply disruptions have cut roughly half of the region's normal imports, forcing buyers to hunt for fuel across the globe—from South Korea to Nigeria to North America. The crisis is pushing prices higher and straining inventories at Europe's key storage hub to seven-year lows.
South Korean shipments to Europe hit 129,000 barrels per day in September, the highest since October 2022. Meanwhile, Asia and the US together hold surplus supplies totaling 437,000 barrels per day that traders are now racing to send eastward across the Atlantic. Rising Middle East tensions threaten even deeper shortages ahead.
South Korea and Nigeria Step Into Supply Gap
South Korean refineries are pumping jet fuel at near-record levels. Production hit 13.89 million barrels in July—a seven-year high—while exports reached their peak in three and a half years according to Kpler data. Nigeria and Canada have joined the supply chain, all chasing higher profit margins as Europe's desperation drives prices up.
Amsterdam Hub Inventories Hit Seven-Year Low
Independent stocks at the Amsterdam-Rotterdam-Antwerp refining and storage hub collapsed to their lowest level in seven years during the week ending September 10. This critical bottleneck sits at the heart of Europe's energy security. Energy Aspects says the continent will remain short of jet fuel all through Q4, making distant imports essential to keep flights running.
Wider Price Spreads Make Long-Distance Shipments Worth It
European diesel prices hit record highs and stayed above Asian prices—a shift that creates strong incentives to reroute cargo westward. Kpler data shows Asia typically exported about 1.5 million barrels monthly to Europe when arbitrage spreads opened. Now those spreads are wider, making long-haul shipments from South Korea and beyond far more profitable despite higher shipping costs.
Middle East Tensions Leave Europe Vulnerable to More Shocks
Ongoing Iran-related disruptions have already eliminated roughly half of Europe's Middle Eastern jet-fuel supply. James Noel-Beswick of Sparta Commodities said imports from distant suppliers will persist because Europe faces structural shortages. Any fresh escalation in the region could worsen the deficit and force even more reliance on overseas cargoes at premium prices.
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