Jet fuel

High jet prices could support European gasoline demand

High jet prices could support European gasoline demand

London, 28 April (Argus) — High jet fuel prices and reduced flight schedules could support European gasoline demand this summer as some consumers opt to drive rather than fly for leisure travel, market sources said. The price of jet fuel cargoes delivered to northwest Europe has soared since the US-Iran war began on 28 February, tightening supply to a region where demand exceeds local production capacity. Europe relies on the Mideast Gulf for around half of its jet fuel imports, according to Kpler. Delivered jet fuel cargo prices have averaged around $1,557/t since the conflict began, about 90pc above the five-year average for the period. Gasoline prices have also risen but to a much lesser extent, averaging about $967.75/t on a fob Amsterdam-Rotterdam-Antwerp basis, roughly 20pc above the five-year average. Europe is structurally long on gasoline and has not faced supply stress during the conflict so far. Since the war began, jet fuel prices have traded at a premium of around 61pc to gasoline benchmarks, compared with near-parity over the past five years, Argus assessments show. That widening price gap, combined with tighter flight availability, could begin to influence travel choices. While higher airfares alone may not deter consumers, cuts to short-haul flight schedules could prompt more people to seek alternatives to flying abroad this summer. "If short-haul flights continue getting cancelled, people are likely to drive to holiday destinations," one analyst told Argus . Another analyst pointed to fuel duty cuts across parts of Europe as an additional factor that will support gasoline demand. German consumers are delaying road fuel purchases until May to benefit from a temporary energy tax exemption , traders said. Smaller European economies including Sweden and Poland are also cutting fuel duties, while larger markets such as the UK and France have yet to introduce similar measures. "The weather is getting better and people will travel less and less by plane," one gasoline trader said, adding that European gasoline demand "looks ok" compared with east of Suez. By contrast, Asia-Pacific markets have seen sharper demand destruction because of greater exposure to crude and refined product supply from the Mideast Gulf, which remains severely restricted by Iran's effective blockade of the strait of Hormuz. European gasoline demand typically rises seasonally as peak summer approaches. This is usually reflected in the gasoline forward curve, where a contango structure implies strengthening time spreads through spring and summer. But the conflict has flipped the curve into backwardation, signalling stronger prompt market fundamentals. That tighter prompt balance is reflected in active physical trading, with at least 16 benchmark non-oxy gasoline barges exchanged this week and at least 60 oxy barges reported traded. Jet market liquidity, however, remains thin by comparison, while trading activity in physical spot windows has also quietened in recent weeks. "Just a couple of things have been trading," a broker said, potentially reflecting elevated jet fuel prices. Bid-offer spreads in paper markets remain at around $10/t, far wider than the typical 25¢-$1/t range, which may be discouraging counterparties from trading at workable levels. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.