US jet fuel production could increase in line with airline demand in 2026 despite the Energy Information Administration's (EIA) projections of a production decrease due to biofuel blending policy for road fuels.
The International Air Transport Association (Iata) expects global airline demand to increase in 2026, with global passenger volumes expected to reach 5.2bn, up by 4.4pc compared to 2025, while cargo volumes are expected to increase by 2.4pc to 71.6mn t.
But the EIA reported in its December Short-Term Energy Outlook that 2026 jet fuel production will average 1.73mn b/d, down by 4.9pc compared to 2025estimated average, noting weakening demand in the next year. The agency expects the first quarter production to average 1.71mn b/d and the fourth quarter production at 1.68mn b/d, keeping the full-year production average down.
But a number of factors — including continued use of less fuel-efficient jets and higher costs for meeting US road biofuel rules — should support US jet fuel production. Jet output is expected to keep pace with 2025 levels or higher, averaging 1.81mn b/d, Argus Consulting forecasts.
Bottlenecks in the production of more fuel-efficient next-generation aircraft delayed the flow of new planes this past year, and are expected to worsen, limiting growth in the aviation section until at least the 2030s. Aircraft delivery delays from major manufacturers like Boeing have increased over the past year due to several factors, including tariffs on metals and electronics deriving from US-China trade tensions and engine production outpaced by airframes output.
Costs around US biofuel blending obligations, particularly for distillates like biodiesel and renewable diesel, are also supportive of jet fuel production. Prices for D4 and D6 RINs, which reflect the cost of meeting Argus Renewable Volume Obligations (RVO) for biodiesel and ethanol, respectively, rose during 2025, from 9.45¢/USG on 2 January, cresting at 17.04¢/USG in June, before falling to roughly 15¢/USG for much of December. In June, the EPA proposed record-high blending targets in the biomass-based diesel category for the next two years — which will likely make compliance costs for those fuels even more expensive.
But unlike road fuels such as gasoline and diesel, jet fuel is not bound by these blend mandates under the RFS. This means refiners looking to taper their blending obligations may retool production assets for more jet fuel and less diesel. A number of refiners are already making that pivot.
Marathon Petroleum, one of the largest US independent refiners, is spending millions of dollars to increase jet fuel capacity at its 253,000 b/d Robinson, Illinois, refinery, which is expected to be completed by the end of 2026. US independent refiner HF Sinclair is also planning to boost jet fuel capacity at its 145,000 b/d Puget Sound refinery in Anacortes, Washington, to help serve the western US market, the company said in a third-quarter earnings call.
CVR Energy started producing jet fuel at its 132,000 b/d Coffeyville, Kansas, refinery during the third quarter of 2025. Another independent refiner, Delek, has upgraded its 83,000 b/d El Dorado, Arkansas, refinery to produce jet fuel, the company said in May.
The EIA does expect more demand for jet fuel in 2026. The product supplied projections for 2026 in the latest STEO was 1.74mn b/d, up by 0.6pc compared to 2025. But it still projects first quarter production to drop to 1.61mn b/d and fourth quarter to reach 1.72mn b/d, with second and third quarter projections higher at 1.82mn b/d and 1.81mn b/d, respectively.
Originally expected to be finalized in late 2025, the EPA is set to confirm biofuel blending targets, as well as consider the reallocation of exempted volumes approved during 2025 in the first quarter of 2026. Doing so would provide biofuel producers and obligated parties alike with a clearer view of expectations for 2026 and 2027.
Unless biofuel production overshoots the thresholds for blending demand, or the EPA chooses not to reallocate a substantial volume of small refinery exemptions, market participants anticipate further continued strength for RIN prices. If these mandates do come to fruition and toughen the obligation refiners face for producing diesel, retooling and pivoting to a higher jet output would alleviate the added cost of producing finished road fuels.
