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U.S. production of jet fuel has likely hit record levels after prices doubled in March due to Iran's blockade of the Strait of Hormuz in its ongoing war with the U.S. and Israel, Reuters reported citing the Energy Information Administration.
Much of the higher U.S. jet fuel output is being exported as supply concerns have been felt most sharply in Europe and Asia, regions that previously imported large quantities of jet fuel from the Middle East via the Strait of Hormuz, the EIA said. Domestic U.S. jet fuel stockpiles remain above average, boosting availability of the product for exports, the agency said.
U.S. jet fuel output has risen since the U.S. and Israel began attacking Iran on February 28, with the four-week average surpassing 2 million barrels per day in the week ended May 1 for the first time on record, EIA said.
Increased output reflects above-average refinery runs and strategic shifts to increase yield of aviation fuel, EIA said.
From March through May, U.S. Gulf Coast jet fuel spot market prices averaged $3.91 a gallon, about double the price at the start of the year, the EIA said.
Jet fuel prices at other major global trading hubs have also averaged double their start-of-year levels in the period from March through May, EIA said.
Weekly estimates based on data from U.S. Customs and Border Protection indicate U.S. jet fuel exports reached record highs in April and May, EIA said.
U.S. jet fuel inventories stood at 45 million barrels as of May 29, 7% above the past five-year average, EIA data showed.
U.S. West Coast may need to raise inventory draws if a recent decline in imports to the region continues, EIA said.
