Prompt-month jet fuel prices in Los Angeles jumped to a 44-month high on Tuesday after news broke of a fuel export cap in South Korea, which supplies the majority of jet imports to the US west coast.
Jet fuel for as far forward as May delivery in Los Angeles was heard traded sharply higher, although March volume began to depreciate in trade heard by the afternoon. Trade for March was heard as high as April Nymex +40¢/USG before declining in a sale at +25¢/USG — still a double-digit increase from business on Monday that had ranged from April Nymex +10-14¢/USG. Cash prices for March jet fuel drew additional support from a higher daily Nymex settlement and reached $4.32/USG, the highest level since June 2022.
The forward curve for spot jet fuel prices remains positive in Los Angeles, with April volume heard traded at May Nymex +70¢/USG on Tuesday, a 25¢/USG jump from the prior day. For May, buyers in Los Angeles were heard to have paid from June Nymex +55-80¢/USG.
War between the US and Iran — and its subsequent upheaval of key crude shipping routes — has introduced a new obstacle for the west coast jet fuel supply chain. South Korea on Tuesday announced mandatory export caps on refined petroleum products, limiting shipments to 2025's monthly levels as the nation moves to safeguard domestic supply. South Korea in 2025 supplied an average of 87pc of jet fuel imported at the US west coast each month, at about 80,000 b/d, according to the Energy Information Administration.
The US west coast was expected to become more reliant on jet fuel imports with the closure of two California refineries in the past six months: Phillips 66's 139,000 b/d Los Angeles complex, which shuttered late last year, and now Valero's 150,000 b/d Benicia site due for full idling by April.
