US dependence on foreign jet grew in 2020

The US grew more reliant on jet fuel imports last year in structurally short regions of the west and east coasts, as poor refining margins for jet fuel meant it was cheaper to import than to raise local production.

Jet fuel imports to the US west coast accounted for 27.4pc of the region's consumption in 2020, at 95,250 b/d, according to data from the US Energy Information Administration (EIA). The share of imports grew from 20.3pc in 2019, even as overall consumption fell by 36pc year-on-year.

The Covid-19 pandemic's destruction of air travel demand spanned continents, but fuel demand began recovering in Asia earlier, enabling refiners there to raise runs more quickly. As a result, South Korea, the largest overseas jet fuel supplier to the US west coast, increased shipments of jet fuel to the US west coast as refiners in California and Washington struggled with thin margins and dialed back jet yields.

US west coast refiners cut jet yields to 12.65pc in 2020, down from 18pc in 2019. West coast jet margins, as measured by LA jet fuel against Alaskan North Slope crude, averaged $7.45/bl in 2020, down from $18.42/bl in 2019.

A similar story unfolded in the US Atlantic coast, another region where imported jet fuel took more market share in the pandemic year.

Jet fuel imports into the US Atlantic coast, at 47,000 b/d, accounted for 13.8pc of the region's consumption in 2020. In 2019, foreign supplies accounted for 8.45pc of the region's jet needs.

In April, Atlantic coast jet fuel production fell below zero — meaning refiners were reprocessing jet fuel into more profitable distillates, likely diesel. During the same month, importers took in 35,000 b/d of jet fuel to the region.

Overall jet yield on the US Atlantic coast fell to 4.42pc in 2020, down from 10.3pc in 2019, EIA data show.

By Chunzi Xu