Europe Faces Jet Fuel Shortage Risk as South Korea Boosts Exports

Post by : Saif

Europe is heading toward another difficult quarter for jet fuel supplies as falling inventories and reduced Middle Eastern shipments increase pressure on the aviation fuel market. Analysts expect the region to remain dependent on imports, with South Korea emerging as one of the latest major suppliers.

Energy consultancy Energy Aspects forecasts that Europe could face a jet fuel deficit of around 510,000 barrels per day (bpd) during the fourth quarter. The forecast comes as the wider Middle East conflict continues to disrupt traditional fuel supply routes.

The third quarter has shown a similar pattern, leaving European buyers increasingly dependent on supplies from outside the region.

South Korea increases shipments to Europe

South Korea has become an important source of jet fuel for European buyers. Shipments from the Asian country to Europe reached about 129,000 bpd in September, according to Kpler data.

That would represent the highest monthly level since October 2022. Data from LSEG also showed similar shipment volumes.

Europe has already increased purchases from countries such as Nigeria, the United States and Canada since the conflict affecting Middle Eastern energy supplies began. Disruptions have reduced a significant portion of Europe's traditional jet fuel imports from the Middle East.

James Noel-Beswick, head of commodities at Sparta Commodities, said European imports are likely to continue because the region is expected to remain short of jet fuel.

Price differences between Asian and European markets are also encouraging more shipments into Europe. When European prices are high enough compared with Asian prices, traders can make greater profits by moving fuel from Asia to European markets.

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European jet fuel stocks fall

Low inventories are adding to concerns about supply availability.

Jet fuel stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell to their lowest level in seven years during the week ending September 10, according to the data cited in the report.

The ARA region is one of Europe's most important oil trading, refining and storage hubs. Lower stocks mean airlines and fuel suppliers have less inventory available to absorb further disruptions.

Jet fuel is classified as a middle distillate, alongside products such as diesel and gas oil. European diesel prices have also risen sharply, reflecting broader pressure across refined fuel markets.

Asia remains an important supplier

Asian refiners have historically supplied jet fuel to Europe when price differences make exports attractive. Average monthly shipments from Asia to Europe stood at about 1.5 million barrels last year, according to Kpler data.

South Korea's strong refining output is giving traders more fuel to work with. The country's jet fuel production reached nearly 13.89 million barrels in July, the highest level in seven years, while exports climbed to their highest level in around three and a half years.

Higher refinery processing rates have supported the increase. South Korean refineries processed around 2.7 million barrels of crude per day in July, up 16% from June, according to provisional government data.

Global supply outlook remains under pressure

Energy Aspects expects the supply situation to remain different across major regions in the fourth quarter. While Europe is projected to face a 510,000-bpd deficit, the United States is expected to have a surplus of about 18,000 bpd and Asia-Pacific a surplus of around 419,000 bpd.

Those regional differences could keep fuel flowing toward Europe if prices remain attractive enough to justify transportation costs.

For airlines and airports, however, continued dependence on long-distance supplies leaves the European market vulnerable to further disruptions. Any additional problems affecting Middle Eastern energy flows could increase competition for available jet fuel and put further pressure on aviation costs.

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