No amount of savvy air travel control can prevent a collision between a growing jet fuel shortage and higher airfares.
East Coast jet fuel prices are showing no sign of retreat from record levels with nearest reinforcements for airports nearly two weeks away, according to shipping data and shipbroking sources.
New York Harbor jet fuel prices are hovering around $7.30 a gallon, a record high for a region that is home to some of the world’s busiest airports. U.S. jet fuel demand is still below pre-pandemic levels, but travel has increased in recent months, with jet fuel supplied now 29 percent higher than last year’s rate.
The East Coast largely relies on shipments on the Texas-to-New Jersey Colonial Pipeline for refined products, as well as imports from Europe. However, Europe is dealing with its own supply constraints due to its reliance on Russian oil.
Distillate exports to the U.S. East Coast – also known as PADD 1 – are down about 60% on a year-on-year basis as Friday, according to Refinitiv Eikon data.
The next vessel carrying jet fuel is not arriving at New York Harbor until April 19, according to Eikon data and shipbroking sources. The Shell-chartered vessel is carrying more than 290,000 barrels of jet fuel from northern France.
Demand for the dwindling supply of distillates has sent prices for medium-range clean product tankers soaring as well, particularly for voyages headed to Latin America.
A CPP vessel carrying distillates from refineries in Texas has been provisionally booked to go to Chile for $4 million, a voyage which usually costs $1.3 million, according to two shipbrokers.
“It’s the highest price I’ve ever seen for something like that,” said one of the shipbrokers.
More from Reuters: U.S. Travel Booking Sites See Strong Summer Demand
(Reporting by Laura Sanicola)