Jet fuel
Overview
Jet fuel market volatility, whether from crude prices, supply issues from refining capacity, or ongoing regulation changes, is a continual risk to your bottom line.
Having a choice in fuel pricing is the best way to mitigate risk and stay on top of market changes. Argus constructs price indexation in a way that is appropriate for each market. By doing so, market participants can align their day-to-day operations, improve management of fuel costs and directly impact their net earnings.
Jet fuel makes up more than 40% of an airline’s total operating expense. The rise in importance of sustainable aviation fuel (SAF) from government mandates and self-regulations from airlines has a direct implication on these operating costs.
Argus helps the jet fuel market participants to make informed decisions and optimize their strategies with price assessments and information on deals done for conventional jet fuel and SAF, as well as the latest market-moving news, in-depth analysis, supply and demand dynamics, and price forecasts.
Latest jet fuel news
Browse the latest market moving news on the global jet fuel industry.
Indonesian pres inaugurates Balikpapan refinery:Correct
Indonesian pres inaugurates Balikpapan refinery:Correct
Corrects headline to clarify this was an inauguration, not the unit's startup Singapore, 12 January (Argus) — Indonesia's president Prabowo has inaugurated the Balikpapan Refinery Development Master Plan (RDMP) project, according to the country's energy ministry. The upgrade is planned to raise the refinery's capacity to 360,000 b/d from 260,000 b/d and added a new 90,000 b/d RFCC unit. Product quality will also improve from Euro 2 to Euro 5 standards. The refinery is expected to begin operations in the first-quarter, said sources familiar with the matter. Pertamina has invested 120 trillion rupiah ($7.4bn) in the project. The RFCC start-up coupled with the adoption of E10 blending is expected to cut Indonesia's gasoline import requirements, capping regional gasoline crack spreads, traders said. Indonesia is Asia-Pacific's largest gasoline importer, with typical demand at 10mn-11mn bl/month. At full capacity, the RFCC could cut imports by around 40,000 b/d, analysts said. Indonesia may also see a diesel surplus when it implements mandatory 50pc biodiesel (B50) blending and ramps up Balikpapan output, the country's energy minister Bahlil Lahadalia said in November. The start-up will also reduce exports of low-sulphur waxy residue, which will be used as RFCC feedstock. The refinery may instead export slurry or residual RFCC material, although this could be used for domestic bunkering if volumes are small, a source close to operations said. The inauguration was initially scheduled for 10 November but was delayed, traders said. By Aldric Chew Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
European diesel market structure flips to contango
European diesel market structure flips to contango
London, 8 January (Argus) — The European diesel market has shifted into a contango structure for the first time in over a year, indicating that supply in the market is currently ample during a seasonally weak period for demand. Front-month Ice January gasoil futures fell to a 25¢/t discount to the second-month February futures by the market close today, falling from a 50¢/t premium the day before. The European diesel market was last in contango — where prompt prices are lower than forward prices — in October 2024. The backwardated structure in futures — where prompt prices are higher than forward prices — narrowed steadily from early December, after reaching a peak in mid-November. Strong supply has weighed on the value of front-month futures this year, particularly from high imports expected from the US, according to one European analyst. Around 450,000t of diesel and other gasoil departed the US for Europe in the week to 2 January, and a further 525,000t has departed since then, according to Vortexa. Both volumes were the highest on the route since June last year. About 1.86mn t unloaded in the EU and UK from the Middle East in December, a seven-month high. The well-supplied market has come at a seasonally low period for regional diesel demand — January and February are normally the weakest months for European road fuel demand. January futures expire on 12 January, which may have also driven the front-month value down, according to a European trader. Traders closing their long positions in January futures before expiry would weigh on prices. The second-month and third-month futures remain backwardated, with February futures settling at a $2.50/t premium to March. Current cold weather in Europe — forecast to get colder still — should provide some support for gasoil futures. By Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Ice gasoil futures and backwardation at eight-month low
Ice gasoil futures and backwardation at eight-month low
London, 8 January (Argus) — Front-month Ice gasoil futures and the time spread between the front-month and second-month contracts both fell to the lowest in eight months at Wednesday's close, as the European diesel market enters its seasonally lowest period of demand. Ice January gasoil futures fell by $13.25/t on the day to $601/t on Wednesday, the lowest settlement price for the front-month contract since 30 May 2025. The January futures settled at a 50¢/t premium to the second-month February futures, the narrowest since 9 May. When prompt prices are greater than forward prices, it is known as backwardation. The outright value of the front-month contract and the backwardated futures structure peaked in mid-November, when supply was tightened by a mixture of low amounts on the water heading to Europe and sanctions-related disruption to supply. European imports have since recovered to higher levels. But the main driver behind the falling outright values and narrowing structure is probably seasonally weak demand. January and February are normally the weakest months for European road fuel consumption. EU diesel deliveries in January and February 2025 were around 5pc below those in December 2024, and almost 10pc lower than any of the other non-winter months in 2024, Eurostat data show. European diesel demand faces further pressure this year from Germany's adoption of the EU's Renewable Energies Directive (RED III), which will adjust the greenhouse gas (GHG) reduction quota and abolish double counting of advanced fuels. To reach the adjusted GHG quota, refineries will probably increase the biofuel content blended with diesel, reducing demand for the latter. Argus estimates at least 1mn t of fossil road fuel demand will be substituted by HVO in Germany this year, with most of that diesel. A disconnect between diesel prices and fundamentals has continued into this year, with the market mostly driven by geopolitical news and sentiment, according to a European trader. That could explain why the January futures' premium against the February contract has narrowed even with EU sanctions coming into force on 21 January that will will remove from the European market Indian and Turkish diesel refined from Russian crude, and with independent stocks of diesel and other gasoil at the Amsterdam-Rotterdam-Antwerp (ARA) hub at a four-and-a-half-month low in the week to 31 December, according to consultancy Insights Global. By Josh Michalowski Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Viewpoint: European jet faces supply-side threats
Viewpoint: European jet faces supply-side threats
London, 6 January (Argus) — Supply-side uncertainties are likely to keep European jet fuel prices turbulent in 2026, with a much quieter outlook for demand. The European jet market in 2025 revealed a vulnerability to supply shocks, even to some that never fully materialised. Cif northwest Europe prices ranged between $622/t and $846/t, and refining margins between $14.60/bl and $41.40/bl. Oversupply in the summer , bolstered by profitable arbitrage economics from Asia-Pacific, pressed down on prices in August. By contrast, tighter supply in October-November boosted prices to some of the highest levels all year. Weaker refinery output in Europe and Asia-Pacific choked global supply, and east of Suez refiners favoured eastbound exports over Europe. The coming year could see similar supply-side fundamentals. The European refining industry is lacking spare capacity, after three permanent refinery closures in 2025. The recent closure of Phillips 66's 139,000 b/d Los Angeles refinery and the upcoming closure of Valero's 145,000 b/d Benecia refinery will tighten Californian supply, requiring transpacific imports. This could tighten the markets in Asia-Pacific that supplement Europe with jet when arbitrage is viable. European jet imports from China and India could become untenable if refiners there continue to process Russian crude, because of new EU sanctions that will ban import of refined products made from Russian grades in January. Even the unrealised threat of supply shocks rattled jet fuel prices in 2025. The brief conflict between Iran and Israel in June sent jet fuel prices to their highest since 2022. Talks regarding peace in Ukraine added yet more volatility as 2025 closed out. Jet fuel crack spreads rose to a two-year high and then fell to a five-week low within one week, even though there was no specific talk of relaxing sanctions and more sanctions are imminent. A return of east-west shipping to the Red Sea in 2026 could restrain jet price volatility. Jet fuel takes around two weeks quicker to arrive in Europe when sent through the Suez Canal than around the Cape of Good Hope, meaning imports could respond more quicker to supply shortfalls. Yemen-based Houthi militants indicated a pause to attacks on commercial vessels, although there has not yet been a mass return to the shorter route. Another calming influence on supply could be growing exports from Nigeria's 650,000 b/d Dangote refinery. The plant broke its monthly record for jet exports three times in 2025, according to Kpler. Although freight is costly from west Africa to Europe, Dangote could be well-placed to help relieve supply tightness in 2026. Bland demand European air travel is forecast to grow in 2026, but at a slower pace. Flight numbers are expected to rise by 3.1pc to 11.4mn in 2026, according to Eurocontrol data, after growing by 3.6pc in 2025. European air travel demand growth, in revenue passenger kilometres (RPK), will slow to 3.8pc in 2026 from 5pc in 2025, according to forecasts by the International Air Transport Association (Iata). Sustainable aviation fuel (SAF) mandates and advancements in aircraft fuel efficiency will only drag slightly on fossil jet demand growth. The proportion of SAF mandated in EU jet blends will stay at 2pc and rise to around 4pc in the UK in 2026, so growth in SAF consumption does not yet appear significant enough to counterbalance overall demand growth. Longstanding issues in aircraft production keep thwarting fuel efficiency improvements . Iata expects the global fleet to become just 1pc more fuel efficient in 2025, only half of recent average annual efficiency gains. Fossil jet demand in north and central Europe and the Mediterranean will average 863,000 b/d in 2026, 1.2pc higher year-on-year, Argus Consulting predicts. By Amaar Khan Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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