Are European jet cracks about to take off?

European jet fuel imports have recently increased, but concerns exist about the sustainability of this trend. Import figures from Northwest Europe have risen to 500,000 barrels per week (mbw) as of early October, up from 350,000 mbw in September, according to a 28-day moving average calculation. However, export and inventory data indicate that this improvement may be short-lived.

Global seaborne exports to Northwest Europe have fallen to a mere 250,000 mbw, a 55% decline year-over-year and a 45% drop from the previous month. This decline is primarily due to a 55% decrease in Northeast Asia's jet/kero exports to Northwest Europe, which dropped to a seasonal low of 30,000 mbw in early October.

The situation appears to worsen as winter approaches, as Japan's kerosene demand increases for heating purposes. This surge in demand is coupled with lower jet and kerosene supply due to reduced inventories and production in the region. Additionally, China has issued a third batch of export quotas for clean products, but the allocated volume for bonded jet fuel used in international flights is significantly lower than in 2025. This allocation will not contribute to seaborne exports.

Furthermore, the Strait of Hormuz has experienced reduced jet/kero shipments, with the last cargo carrying jet fuel transiting on September 12. The 14-day moving average of jet/kero loaded west of Hormuz is at 140,000 mbw, a substantial decline from 420,000 mbw a month earlier. The slower transit times and increased transfers via the Straits of Taiwan (STS) after exiting the Strait make it unlikely that substantial jet fuel from the Middle East will reach Northwest Europe soon, given the current security climate.

US Gulf Coast has been a significant supplier to Europe, providing 130,000 mbw in August and 60,000 mbw in September. However, jet inventories in PADD 3 have declined by 1.4 million barrels week-over-week as of October 2, standing below the 5-year seasonal average. Jet production in PADD 3 is still at a seasonal high but near 2025 levels, while PADD 1 production remains relatively low.

This combination of lower inventories and production could lead to reduced exports from PADD 3 to Northwest Europe, as more US jet fuel remains in domestic markets.