Poten's Weekly Opinion: Grounded?

Jul 23 2021


Jet fuel demand remains well below pre-pandemic levels.

Jet fuel is the oil product that has been hit the hardest by the global pandemic. As the Covid-19 virus spread globally in early 2020, widespread lockdowns shut down national and international air travel. In their latest Medium-Term Oil Market Report, the IEA expects that “jet fuel consumption will only return to 2019 levels by 2024 as travel restrictions, changing travel habits, and the relatively slow progress of vaccinations in low-income economies cap its recovery.”

 

The IEA goes on to say that “the proliferation of online meetings and conferences, along with cost cuttings by companies, are likely to permanently dent business travel.” Average jet fuel consumption was 7.9 Mb/d in 2019, representing about 8% of global oil demand. In 2020, consumption fell more than 40% to average 4.7 Mb/d. Its share of global oil demand fell to a little over 5%.

 

While demand is expected to grow 17% to 5.5 Mb/d in 2021, it remains well below pre-pandemic levels. Jet fuel is a widely traded commodity and the precipitous fall in demand has had an impact on product tanker demand.

 

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