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Jet fuel
Overview
Jet fuel market volatility, whether from crude prices, supply issues from refining capacity, or ongoing regulation changes, is a continual risk to your bottom line.
Having a choice in fuel pricing is the best way to mitigate risk and stay on top of market changes. Argus constructs price indexation in a way that is appropriate for each market. By doing so, market participants can align their day-to-day operations, improve management of fuel costs and directly impact their net earnings.
Jet fuel makes up more than 40% of an airline’s total operating expense. The rise in importance of sustainable aviation fuel (SAF) from government mandates and self-regulations from airlines has a direct implication on these operating costs.
Argus helps the jet fuel market participants to make informed decisions and optimize their strategies with price assessments and information on deals done for conventional jet fuel and SAF, as well as the latest market-moving news, in-depth analysis, supply and demand dynamics, and price forecasts.
Latest jet fuel news
Browse the latest market moving news on the global jet fuel industry.
Competing US farm bill drafts boost SAF
Competing US farm bill drafts boost SAF
New York, 12 June (Argus) — Republicans and Democrats say they still have work to do to negotiate a final agreement around this year's US farm bill, although proposals from both parties include provisions to boost production of sustainable aviation fuel (SAF). Senator John Boozman (R-Arkansas) released the latest proposal on Tuesday, which represents the view of the minority Republicans on the Senate Committee on Agriculture, Nutrition, and Forestry. The bill clarifies that SAF is an eligible technology under a federal program that offers loan guarantees for the construction and retrofitting of biorefineries. Similar language appeared in the Republican-backed farm bill draft that passed the House Committee on Agriculture last month and in Senate committee chair Debbie Stabenow's (D-Michigan) Democratic-backed farm bill framework. The Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program currently offers support to producers of "advanced biofuels," a category that does not explicitly include alternative jet fuels and specifically limits fuels derived from corn starch. A revised definition of "advanced biofuels" could also allow SAF to benefit from other US Department of Agriculture (USDA) programs, including one that pays companies to expand production of renewable fuels. Corn growers and ethanol producers, which could benefit from Inflation Reduction Act tax credits for low-carbon fuels, are among the groups calling for the farm bill to include such SAF provisions. The White House has set a 2030 goal for US SAF production to reach at least 3bn USG/yr (200,000 b/d), although the types of fuels that can qualify for federal support are still up in the air. Some environmentalists have backed restrictions around crop-based feedstocks while biofuel and airline groups support more flexibility. The similar SAF language in the three proposals is notable given rifts between Democrats and Republicans over other elements of the farm bill, a major five-year agriculture policy package set to expire after September this year. While a handful of Democrats crossed party lines to advance the House proposal out of committee, others have criticized it for cutting food assistance and removing "climate-smart" requirements included in the Inflation Reduction Act for USDA conservation programs. Stabenow said that key differences remain between her proposal and Republican bills but that she was looking forward to working with lawmakers to "finish our work by the end of the year." Full legislative text is not yet available for the Stabenow and Boozman proposals, and it is unclear when the Senate committee will mark up a final bill. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Airlines face jet fuel shortage at Japanese airports
Airlines face jet fuel shortage at Japanese airports
Tokyo, 11 June (Argus) — Airline companies are grappling to secure jet fuel at Japanese airports partly because of labour shortages in the country's logistics sector, and some foreign airlines have abandoned plans to open up new routes to Japan. Korean Airlines (KAL) in May scrapped its plan to launch a new flight route from Seoul, South Korea to Obihiro airport in Japan's northern Hokkaido province, according to an Obihiro city official that spoke to Argus on 11 June. The city had anticipated an increase in tourists from South Korea with the opening of this new route, under which there was supposed to be two flights a week. KAL scrapped the plan mostly because the airline cannot procure enough jet fuel at the airport on the back of limited domestic transportation, the Obihiro official added. Logistics have been affected by a driver shortage,which has been a major economic issue in Japan, especially after the country in April introduced a new law imposing an upper limit of 360 overtime working hours/yr for the land transportation industry. Jet fuel is carried by lorry to the Obihiro airport after it arrives at a nearby major port, an official from the country's ministry of land, infrastructure, transport, and tourism (Mlit) told Argus . Obihiro had already been facing a driver shortage as the region's population is shrinking, the Mlit official added. This is also part of a wider labour shortage problem in Japan as there is lack of fuelling staff at domestic airports nationwide. Domestic vessels are also facing crew shortage problems as the aforementioned law was also imposed in 2022 on the maritime transportation sector, according to Mlit. The number of voyages by domestic vessels carrying jet fuel between refineries and the country's major Haneda airport in Tokyo has fallen to around 15/month, down by 40pc after the country imposed the law, the Mlit official added. The law initially did not have such a significant impact on jet fuel demand as the country was still under Covid-19 restrictions, with air travel limited at that time. But jet fuel demand is likely continue rising, following an increase in foreign tourists visiting Japan after the pandemic. The number of foreign arrivals surged to 11.6mn during January-April, according to the Japan National Tourism Organisation, up by 72pc from the same period a year earlier. Airlines are also becoming increasingly concerned as domestic vessels are also supposed to carry kerosine to Hokkaido around this time of year, as residents in the coldest part of the country will stockpile the fuel for the upcoming winter season. Using domestic vessels to transport jet fuel instead of kerosene is a controversial issue, the Mlit official added. But there is enough jet fuel supply domestically, said the country's minister of trade and industry (Meti) Ken Saito on 11 June, reiterating that Meti along with Mlit and domestic refiners have been tackling the issue since March. Japan's jet fuel stocks on 1 June totalled 5.18mn bl, according to the country's industry group Petroleum Association Japan, up by 6.4pc from the previous month. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Calif diesel stocks dip to record-low: CEC
Calif diesel stocks dip to record-low: CEC
Houston, 6 June (Argus) — Combined California diesel inventories slipped to a new all-time low as another drop in in-state CARB diesel stocks extended the prior week's draw . The state's overall inventory — accounting for both conventional and renewable diesel — shrank by a further 3.7pc to just 2.2mn bl in the week ended 31 May, according to latest data from the California Energy Commission (CEC). California CARB ultra-low sulphur diesel (ULSD) stocks drew down by 9.8pc to 1.2mn bl as regional refiners curtailed production by 32pc. California CARB output averaged 87,000 b/d, the lowest rate since 15 March. The downturn outpaced the 5.4pc growth in inventories of other diesel fuels, which includes non-California EPA ULSD and renewable diesel. Stocks of other diesel fuels ended the week at 979,000 bl, while production averaged 28pc higher week to week at 66,000 b/d, per the CEC. Total gasoline inventories also contracted, by 1.6pc to 7.3mn bl, as California's overall gasoline output fell by 1.4pc. CARBOB stocks slipped by 2pc to 6mn bl as CARBOB output fell by 10pc to 717,000 b/d. This more than offset an 89pc jump in production of non-California gasoline, which reached 149,000 b/d. Jet fuel production climbed by 4.8pc to average 337,000 b/d — the highest level since 5 April. Inventories fell by 1pc to 3.2mn bl. Crude throughputs slipped by 2.2pc to 1.4mn b/d, but crude inventories were largely stable at nearly 11.1mn bl. By Jasmine Davis California refining throughputs and storage Commodity 31-May-24 24-May-24 ± Throughputs '000 b/d Crude 1,408 1,440 -32 CARBOB 717 800 -83 Total gasoline 867 879 -12 Jet fuel 337 321 16 California distillate 87 128 -41 Inventories '000 bl Crude 11,094 11,098 -4 CARBOB 5,977 6,098 -121 Jet fuel 3,203 3,235 -32 California distillate 1,238 1,373 -135 California Energy Commission Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Brazil's Porto Alegre airport to stay shut to Dec
Brazil's Porto Alegre airport to stay shut to Dec
Sao Paulo, 4 June (Argus) — The Salgado Filho international airport in Porto Alegre, in flood-hit Rio Grande do Sul state, is expected to remain closed until December, German airport management company Fraport said. The airport sustained significant damage in the record floods that hit that state in late April and early May. The floodwaters only recently receded, allowing Fraport to begin cleaning the terminal and clearing the runway. Prior to the floods, the airport had forecast that it would have 5,404 domestic and international flights and transport over 608,000 passengers in April. The company has yet to issue a firm assessment of the damage to the terminal and runway, but hopes that the airport will resume operations by the end of the year. Some flights have temporarily been redirected to the nearby Canoas air force base and Fraport is operating a temporary terminal at a shopping mall in Canoas. The airport was Brazil's eighth busiest in passengers transported in 2023. The floods have left at least 172 dead and over 579,000 people displaced, according to the state's civil defense. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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