Military Needs Drive Growth in Russian Jet Fuel Market

摘要

Robust demand from both civilian and military aviation boosted Russian jet fuel production by 15% last year to 11.1 million metric tons. Military needs to fuel the campaigns in Syria and Crimea played a key role in what analysts say is a "demand-driven story." In previous years, "deliveries to federal structures," which would include not only Russia's air force but departments such as the national rescue service, typically accounted for 11%-13% of domestic jet fuel consumption, or about 1 million tons. That level was exceeded in 2017 due to ongoing military operations. Moscow-based sources tell Jet Fuel Intelligence that Russia's defense ministry monopolized the purchases of jet fuel from Rosrezerv, a strategic warehousing agency that continually buys petroleum products from refiners, stores the supplies and sells the volumes back to the market. The defense ministry apparently took all of the 545,669 tons of jet fuel that Rosrezerv sold last year, which was a major driver for the late-summer price surge on the spot market (JFI Sep.11'17). In previous years, traders could count on some of these volumes for winter diesel blending. Rosrezerv purchased 593,432 tons of jet fuel in 2017, according to data from Russia's rail operators.