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airlines are grappling with soaring jet fuel costs again after the return of hostilities in the Middle East shattered the three-week-long U.S.-Iran 'deal to make a deal' and sentBrent crude oil pricessoaring past $100 per barrel again.
jet fuel market has been tightening since March, although there haven't been concerns about any shortages in America, unlike in Europe, which in April was supposed to run out of stockpiles within six weeks.
Europe didn't see shortages, but the global markets tightened, and prices spiked amid peak seasonal demand during the summer holiday travel.
jet fuel exports, and exports of all other fuels including gasoline and diesel,hit record highsthis month as refining margins soared with crude supply still constrained at the Strait of Hormuz.
The result is spiking fuel costs that depress airline earnings and raise air fares for consumers.
West Coast were most under stress in the spring as the region relies more on imports than the other PADDs.
Therefore, in a first, Southwest Airlines chartered a vessel to ship jet fuel from Houston to Los Angeles via the Panama Canal.
"It brought like a week's supply to the West Coast at a time when supply was most constricted ...
when it was most at risk," Southwest Airlines chief financial officer Tom Doxey toldCNBCthis week.
The shipment was made possible by the Trump Administration'swaiver of the Jones Act, which temporarily suspends the requirement that shipments between U.S.
ports be carried on a U.S.-owned, flagged, and crewed ship.
The shipment of about 12.6 million gallons of jet fuel arrived in Los Angeles at the end of May, as Southwest sought to ease upward pressure on jet fuel prices.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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