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A surge in the number of passengers looking to travel via air is creating a tight jet fuel market that is pushing up costs for airlines and those looking to purchase flights, according to Reuters.
Behind the U.S. jet fuel squeeze is a hoard of willing airline passengers who are looking to travel post-pandemic, after movements were restricted.
According to the latest data from the Energy Information Administration (EIA), there were 36.532 million barrels of kerosene-type jet fuel in the United States as of February 10—the lowest for this time of year since 1985, but up 714,000 barrels from the week prior.
A distillate jet fuel competes with refinery time with other stretched class members such as diesel.
The tight market has sent jet fuel prices to $3.37 per gallon, or $142 per barrel last year. For perspective, Reuters lists the 2019 average price for a gallon of jet fuel at just $2. This means that in 2022, airlines spend $56 billion on jet fuel alone—up from $36 billion in 2019.
Now that China is backing away from its strict zero-covid policy, global airline traffic is set to see at least some level of increase, sucking up even more jet fuel and tightening the global jet fuel market even more.
The United States has an ambitious plan to meet 100% of its jet fuel demand with sustainable fuel by the year 2050. But to achieve this goal, renewable jet fuel costs must come down substantially. Renewable jet fuel currently accounts for just 0.1% of all aviation fuel. High fossil fuel-derived jet fuel prices and the current tight market could spur innovation in the renewable jet fuel space. Airlines such as American Airlines are already investing in biofuels to come up with their own.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.