Mideast Suppliers Dominate Europe’s Record-High Jet Imports

摘要

Europe’s steep early-year jet fuel contango drew in record volumes of imports in 2016 as traders sought to build up tanks and cash in on sharply higher forward prices. Latest International Energy Agency (IEA) data for the nine months to end-September show total jet fuel imports up 12% on last year to an all-time high of 16.7 million metric tons (482,000 barrels per day) with huge gains in Mideast refining capacity visibly crowding out long-haul jet fuel suppliers like South Korea. Bumper imports regularly overwhelmed Europe’s port and tank infrastructure this year with temporary floating storage becoming a regular feature of the region’s jet market (JFI Oct.31’16). Up to 500,000 tons of jet was still on the water as Europe’s spot market winds down for Christmas and New Year holidays, with Swiss trader Vitol using the newbuild Suezmax Star Energy and the Aframax/LR2 Optimus to hold 235,000 tons of jet fuel in the UK’s Southwold floating storage area. European major Royal Dutch Shell also has fuel still on board at least two Aframax/LR2-sized vessels moored in European waters - the Navig8 Expedite and the Alpine Confidence (p3). Nonetheless, Europe has consistently priced above US and Asian markets this year despite the obvious oversupply with European majors accused by some of deliberately driving up benchmark prices, which are automatically passed onto airline customers.