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U.S. jet fuel costs jump as Middle East hostilities lift crude prices
Brent crude moved back above $100 per barrel as refining capacity stayed constrained at the Strait of Hormuz, tightening jet fuel supply while summer travel demand peaks.
OilPrice reports that U.S. airlines are facing higher jet fuel costs again after renewed hostilities in the Middle East disrupted a three-week U.S.-Iran “deal to make a deal” and pushed Brent crude back above $100 per barrel.
The outlet says the U.S. jet fuel market has been tightening since March, with no reported shortage concerns in America, while Europe faced tighter global conditions and price spikes during peak summer holiday travel demand.
OilPrice adds that U.S. jet fuel exports, along with exports of gasoline and diesel, hit record highs this month as refining margins rose with crude supply still constrained at the Strait of Hormuz.
The pressure has started to feed through to airlines’ economics, the report says, including an example where Southwest Airlines chartered a vessel to move jet fuel from Houston to Los Angeles via the Panama Canal during the spring period when West Coast stocks were under the most stress. It said the shipment was made possible by a Trump Administration waiver of the Jones Act, temporarily suspending shipment requirements between U.S. points, and that Southwest’s CFO Tom Doxey described the move as adding about a week’s supply at a time when supply was most at risk.
Latest closeWTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%|Gasoline (RBOB) $3.272 ▼6.4%