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Jet fuel exports from the five Gulf states fell by around 80 per cent in March during the Iran war as part of a wider disruption that wiped more than 10 million barrels per day from global oil supply.
Exports of the fuel used in aviation and related industries fell 79 per cent to 127,000 barrels per day in March, down from 605,000 bpd a year earlier, according to data from shipping intelligence platform Kpler.
After the start of co-ordinated US-Israeli air strikes against Iran on Feb 28 and Tehran’s retaliatory strikes, shipping traffic via Hormuz, which supplies a fifth of the world’s oil, came to a halt. Before the war, Gulf states accounted for up to 32 per cent of the world’s jet fuel supply. The region's share of global jet fuel supply collapsed to 8.2 per cent in March and a mere 3.7 per cent in April.
Airspace closures forced airlines to divert or suspend routes over Iranian and Iraqi airspace, adding to pressure on markets that are heavily dependent on Gulf jet fuel supply.
Supply collapse
Kuwait, the region's largest exporter and the world’s second-largest supplier of the fuel, loaded just 9,800 bpd in March. The Gulf state reported a 97 per cent decline from 284,500 bpd a year earlier. The UAE’s exports fell 81 per cent, Bahrain's 61 per cent, and Oman's 55 per cent.
Saudi Arabia and Oman were the only two members to maintain any meaningful volumes during this period. Qatar, a significant producer and supplier of liquefied natural gas, was not included in the estimates. Qatar sold just 19,000 bpd over the last 12 months, with no exports reported since October.
Saudi Arabia and Oman have sold some volumes during the war through export lines that lie outside of Hormuz. Saudi Arabia used the East-West Pipeline, which runs 1,200km across the Arabian Peninsula to Yanbu on the Red Sea. The route allowed Saudi Arabia to meet supply commitments by loading cargoes through its western terminals in March and April. Oman also sold cargoes through terminals at Salalah and Duqm, on the Arabian Sea coast south of Hormuz.
Buying patterns
During the war, the US has emerged as the top destination for Gulf jet fuel. Exports for March were up 63 per cent year-on-year at 298,700 bpd. South Korea was the second-largest buyer in March at 291,400 bpd. China, which is typically the largest single buyer of jet fuel from Gulf states, fell to third position, buying 228,700 bpd in March.
India, which sources crude and refining products via Hormuz, also had dwindling supplies of jet fuel. Its exports dropped by half to 82,000 bpd in March.
Jet fuel loadings until April 20 showed no material pick-up in jet fuel exports for the month, with the region selling just 48,800 bpd so far, largely sourced from Saudi Arabia and Oman.
