Global aviation fuel demand set to reach pre-pandemic levels by 2025, S&P reports
![Global aviation fuel demand set to reach pre-pandemic levels by 2025, S&P reports](https://www.azernews.az/media/2024/08/08/sustainable-aviation-fuel.jpg)
In June, global air passenger travel, measured in revenue passenger kilometers (RPK), surged by 9.1% year-on-year, driven by the summer vacation season, leading to increased jet fuel prices, according to the International Air Transport Association, Azernews reports citing S&P Global Commodity Insights that international demand grew by 12.3% year-on-year during the same period, with the Asia-Pacific region leading at 22.6%, followed by Africa and Latin America at 16.9% and 15.3%, respectively.
On August 6, Platts, a division of S&P Global Commodity Insights, reported that the CIF NWE jet cargo price differential stood at a premium of $48.75 per ton over the front-month ICE LSGO futures contract, significantly higher than the year-to-date low of $9.75 per ton recorded on March 3.
Commodity Insights forecasts global jet fuel and kerosene demand to reach 8 million barrels per day this summer, a level not seen since late 2019. The annual average is expected to return to pre-pandemic levels by 2025.
Since 2021, the average global annual jet fuel/kerosene demand growth has been a major driver of oil demand, with projections of around 550,000 barrels per day in 2024, slowing to 300,000 barrels per day in 2025, largely driven by Western Europe and China.
Despite a retreat from the peak caused by the Russia-Ukraine conflict, jet fuel spreads in Europe and the US Gulf Coast remain robust, exceeding the historical average of approximately $16 per barrel. Jet fuel prices are expected to remain above diesel prices through the end of the year and into next year.
Looking ahead, Commodity Insights anticipates that jet crack spreads may narrow on average but could still exceed the long-term historical range of up to $20 per barrel. S&P Global expects global jet demand to continue growing rapidly, with summer air travel driving jet fuel prices closer to pre-pandemic levels.
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