BAKU, Azerbaijan, November 13. Jet fuel prices are anticipated to reach an average of $98.5 to $112.25 per barrel in 2023, contingent on regional disparities, with current prices exceeding $100 per barrel, Trend reports referring to Commodity Labs.
The industry is witnessing a sustained surge in demand, approaching 3 percent below pre-COVID levels as both passenger and cargo traffic rebound post-lockdowns.
However, growth is expected to taper off in 2025, following two years of robust expansion. The initial boost from mainland China's reopening and subsequent jet fuel rebound is projected to wane, with refined product demand growing by 0.6 million b/d in 2025 compared to 2.0 million b/d in 2023 and 1.1 million b/d in 2024.
Peak demand for jet fuel is anticipated to occur later than other refined products due to the energy density requirements of air travel. The recovery of the global aviation sector post-COVID is impeded by challenges arising from aging jet fuel supply infrastructure, causing operational disruptions for airlines and fuel suppliers globally. These issues also pose a potential threat to the adoption of sustainable aviation fuels (SAF).
Despite positive trends such as global passenger traffic nearing 99% of pre-COVID levels in 2023 and projected to rise to 109% in 2024, challenges persist in ensuring adequate jet fuel supplies. Aging infrastructure and related bottlenecks are at the heart of the problem. Thomas Richter, Lufthansa's head of fuel purchasing, highlighted obstacles faced by airlines, including pipeline-capacity constraints at key airports like Frankfurt in Germany and Denver in the US.
Additional challenges include a lack of rail slots, railcars, and train drivers, disrupting supply chain logistics, especially in landlocked locations like Switzerland's Zurich airport. Limited tank capacity and inadequate inventory levels affect various airports globally. Incidents like pipe leakages and damaged rail tracks further constrain fuel supplies in cities like Paris, San Diego, and Johannesburg. Staff shortages, out-of-order refueling bowsers, and frequent strikes contribute to disruptions, as seen in Lyon, France. Refinery closures across Europe compound the challenges, increasing import requirements and costs for airlines.
The complexity of the issue is exacerbated by delays at tanker ports. The situation poses a significant obstacle to the full recovery and sustainable growth of the global aviation sector, emphasizing the urgent need for addressing infrastructure shortcomings.
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