Europe's Jet Fuel Deficit Set to Persist Into Q4 as South Korea Steps Up Supply

LONDON — Europe faces a fourth-quarter jet fuel deficit even as it buys from more distant suppliers such as South Korea, Reuters reported on September 21. Consultancy Energy Aspects forecasts the European deficit at 510,000 barrels per day (bpd) in the fourth quarter, against surpluses of 18,000 bpd in the United States and 419,000 bpd in Asia-Pacific. It forecasts a similar deficit for the third quarter, which ends this month.

The Iran war, which began more than six months ago, hit Middle East supplies and cut off around half of Europe's jet fuel imports, according to Reuters. European buyers have since imported more from countries including Nigeria, the United States, and Canada.

Imports From South Korea at Highest Level Since 2022

European imports of jet fuel from South Korea so far in September stand at 129,000 bpd, the highest since October 2022, according to Kpler data cited by Reuters. LSEG data shows similar volumes.

South Korea's jet fuel production reached a seven-year high of almost 13.89 million barrels in July, and its exports hit a three-and-a-half-year high, according to government data cited by Reuters. Higher refinery runs contributed to the output increase. Provisional figures put July runs at 2.7 million bpd, up 16% from June, and traders expect August runs to be firmer.

Prices and Stocks

Asia is a swing supplier of jet fuel to Europe, and traders typically turn to it when the price difference between the two regions makes the trade profitable, Reuters reported. James Noel-Beswick, head of commodities at market intelligence firm Sparta Commodities, said the widening spread between Asian and European benchmarks is making exports to Europe more profitable, and that imports are set to continue with the continent expected to remain short of jet fuel. European diesel, which like jet fuel is a middle distillate, hit a record high last week, firmer than Asian diesel markets.

Independently held jet fuel stocks in the Amsterdam-Rotterdam-Antwerp refining and storage hub fell to their lowest level in seven years in the week to September 10, Reuters reported.

Fuel Pressure on European Airlines

The International Air Transport Association (IATA) raised the supply risk in April. Director General Willie Walsh said IATA estimated that Europe could start to see some flight cancellations for lack of jet fuel by the end of May, and urged authorities to prepare coordinated plans, including slot relief, in case rationing became necessary.

In June, IATA cut its 2026 industry net profit forecast to US$23bn from US$41bn, projecting that jet fuel would average US$152 a barrel this year, up from US$90 in 2025. International Airlines Group, parent of British Airways (BA) and Iberia (IB), dropped the capacity growth it had planned for 2026 in July, citing suspended Middle East services, engine-related aircraft availability, and competitive short-haul markets. Fuel remained the main pressure on its earnings, even as the group trimmed its modeled full-year fuel cost.

The Reuters report does not say whether current supply conditions have led to fuel restrictions at European airports or schedule changes by airlines.