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Jet fuel demand is slowly recovering from the slump last year, and although the rise in passenger numbers nearly everywhere is encouraging, the meaningful recovery of aviation fuel consumption will return with the return of international travel and long-haul flights, analysts say.
“You see the passenger numbers are recovering, but they are flying shorter distances, so the relationship between the passenger number and the jet fuel demand is distorted,” Cuneyt Kazokoglu, head of oil demand analysis at FGE, told Reuters.
Since long-distance flights consume more aviation fuel than shorter fights, the reopening of international travel and quarantine-free vacations abroad will be a big boost to jet fuel demand when this happens at some point later this year.
U.S jet fuel demand is rising along with an increase in domestic air travel, the Energy Information Administration (EIA) said earlier this month.
However, a full recovery to the pre-pandemic levels would take place when most long-haul flights return, according to analysts.
The recovery of global aviation fuel demand is expected to be the slowest among all fuels, and a return to pre-pandemic levels is unlikely at least until 2023, analysts say.
Despite the rise in the number of commercial flights in recent months, which have more than doubled since April 2020 and even tripled on some days in major domestic markets such as the United States, the jet fuel demand recovery is currently led by domestic travel. Further advances in vaccination rates in more countries will be needed so that international flights return to some sort of normalcy and boost jet fuel demand, analysts say.
Last week, signs emerged that there could be an opening for the summer holidays. In Europe, the European Commission proposes that the European Union (EU) allow entry for non-essential travel for anyone who has received the last dose of an EU-approved vaccine at least two weeks before arrival.
Some of the largest EU economies—including major travel destinations such as Italy—are also gradually reopening, signaling increased domestic travel first and international arrivals later.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.