Australia and Japan face jet fuel supply crunch as China cuts exports
Both Australia and Japan are heavily reliant on Chinese jet fuel, but shipments have plunged in recent weeks amid the Iran war
China is Asia-Pacific’s largest jet fuel and kerosene exporter, but shipments from the country fell nearly 40 per cent month on month in March to 204,000 barrels per day, figures from trade data provider Kpler showed.
The cutback is likely to hit hardest in Australia and Japan, which are both heavily reliant on Chinese jet fuel, according to Kpler. Other countries affected include Vietnam, Malaysia, the Philippines, Singapore, South Korea, Canada and the United States.
Global jet fuel prices have roughly doubled since the start of the war, soaring from US$99.40 per barrel during the last week of February to US$195.19 per barrel last week, according to data from market intelligence firm Platts.
Scott Charlton, chief executive of Sydney Airport, warned in early March that there were no guarantees that Australia’s airports would receive aviation fuel the following month, as the country remained overreliant on overseas supplies.
Australian Transport Minister Catherine King and Energy Minister Chris Bowen held talks with airlines including Qantas and Virgin Australia on March 12, seeking to reassure them that fuel supplies would hold up.
“Australia will be able to source jet fuel from elsewhere, but it will be at a cost,” said Michael Feller, co-founder and chief strategist at consulting firm Geopolitical Strategy in Melbourne.
“Australia’s limited refining capabilities have proven a strategic weakness and will be reflected in higher airfares and lower airline margins.”