Europe’s Fuel Crisis Spreads From Diesel to Jet Fuel

Europe is grappling with a fuel crisis that has spread from diesel to jet fuel, as the final quarter of the year approaches. According to Energy Aspects, the region could face a jet fuel supply shortfall of 510,000 barrels daily in the upcoming quarter, Reuters reported. The consultancy also noted a jet fuel surplus of 18,000 barrels daily in the United States and a substantial 419,000-bpd surplus in the Asia-Pacific region.

European stocks of jet fuel are at their lowest level since 2019, with inventories at the Amsterdam-Rotterdam-Antwerp hub dropping to 454,000 tons in the week ending September 10, their lowest in seven years. South Korea has become the primary jet fuel supplier to Europe, with imports at a daily rate of 129,000 barrels. European fuel prices are soaring to record highs, with gasoline and diesel reaching all-time peaks across the European Union.

This inflationary trend is likely to exacerbate already high eurozone inflation, which reached 14.3% in August, Euronews reported. The situation is exacerbated by Saudi Arabia's cancellation of crude oil shipments to European refiners in October, following Houthi attacks on energy infrastructure. Gasoline prices in the EU have increased by 29% since the beginning of the year, while diesel fuel prices have risen by 40%.

ECB officials anticipate peak diesel margins next month, citing peak gasoline margins in August. However, Goldman Sachs warns that refiners' increased diesel production may lead to a reduction in gasoline production, potentially causing a fuel shortage later on.