U.S. jet fuel production rises after prices doubled in March
Weekly estimates suggest U.S. jet fuel production has increased to record highs in response to elevated jet fuel prices after the Strait of Hormuz closed on February 28. Higher crude oil prices and supply concerns, particularly in Europe and Asia, which previously imported much of their jet fuel supply from the Persian Gulf, have driven up jet fuel prices. Much of the increased U.S. jet fuel production is being exported, as domestic inventories remain above average.
U.S. jet fuel production has increased since February 28, when the four-week average production was 1.7 million barrels per day (b/d). In the week ending May 1, the four-week average estimate of U.S. jet fuel production surpassed 2.0 million b/d for the first time on record, reflecting both above‑average refinery runs and strategic shifts to increase jet fuel yields.
U.S. refiners have been maximizing jet fuel production to take advantage of high jet fuel prices and margins. From March through May, U.S. Gulf Coast jet fuel spot prices averaged $3.91 per gallon (gal), about double the price at the start of the year and higher than regional spot prices for both gasoline and diesel fuel.
The jet fuel crack spread on the U.S. Gulf Coast, an indicator of the profitability of refining crude oil into jet fuel in the region, averaged $1.25/gal in March through May, up from $0.42/gal at the start of the year. Jet fuel prices at other major trading hubs such as Amsterdam–Rotterdam–Antwerp (ARA) and Singapore also averaged about double their start‑of‑year levels and recorded higher crack spreads over the same period.
Jet fuel prices in Europe and Asia traded at significant premiums to the U.S. Gulf Coast in March and April, attracting U.S. barrels to replace imports from the Middle East. Weekly estimates based on transactional trade data from U.S. Customs and Border Protection indicate U.S. jet fuel exports reached record highs in April and May as buyers sought alternative supply.
Jet fuel prices in Europe and Asia are now closer to U.S. Gulf Coast prices, and prices are below their April peaks in all three regions. Concerns about an imminent jet fuel shortage have eased as additional supply reached the market and trade flows adjusted.
Despite the increased export demand, U.S. jet fuel inventories have remained above average. As of May 29, U.S. jet fuel inventories totaled 45 million barrels, about 7% above the 2021–2025 average.
Inventories on the U.S. West Coast, the region that relies most heavily on jet fuel imports, also remain above average. However, if the recent decline in imports to the West Coast continues, the region may need to increase draws from inventories to balance local jet fuel demand.
U.S. jet fuel production rose sharply after February because the Strait of Hormuz closure and higher crude prices pushed jet fuel prices up, encouraging refiners to maximize jet fuel output.
In the week ending May 1, the four‑week average of U.S. jet fuel production surpassed 2.0 million barrels per day for the first time on record.
From March through May, U.S. Gulf Coast jet fuel spot prices averaged $3.91 per gallon, roughly double their level at the start of the year and above gasoline and diesel prices.
After the closure, European and Asian prices traded at premiums to the U.S. Gulf Coast, pulling record U.S. jet fuel exports in April and May to replace lost Middle East supply.
No, U.S. jet fuel inventories remain above the 2021–2025 average, although the West Coast may need to draw more from stocks if imports stay weak.
