Omicron, global jet fuel demand under pressure from border curbs


On Tuesday, the global jet fuel market remained under pressure as it tightened border restrictions to keep new variants of the Omicron coronavirus away and urged travelers to reconsider their plans.

According to a November 16 report by the International Energy Agency, jet fuel demand, the largest lag in the oil complex, recorded the strongest growth of 550,000 barrels per day in the fourth quarter at 5.9 million barrels / day. It was expected to be.

But now, Omicron poses the greatest risk to jet fuel consumption. Hong Kong has extended bans on non-residents from several countries to increase travel restrictions after Israel and Japan have already announced border closures for all foreign travelers.

The UK and Australia have tightened all arrival rules for the new variant, but hundreds or thousands of travelers are considering canceling or postponing their trip in response to the new restrictions. increase.

“The real risk from the new variant is … the re-imposition of a wider range of flight restrictions during the winter, which will again significantly reduce the current global jet fuel demand of about 6 million barrels per day,” Energy said. Consultant FGE said in a memo.

The Asian refining margin for jet fuel fell to a low of $ 6.92 a barrel in more than two months on Monday.

Goldman Sachs analysts said in a note on November 26, “Current jet demand levels are far higher in cases and hospitalizations, just one mb / d above last winter before widespread vaccination. I am. “

“Worst-case results could return to last winter’s levels, but given what we currently know, they are 0.5 mb / d below the current base case by the second quarter of 2010. “

Most of the world’s airlines, which have been struggling since most of their long-haul international flights have landed since the plunge in air travel last year, are now limiting the impact of the latest variants on their networks. I am scrambling.

“In total, 2.4% of the planned (global airline) capacity has been removed over the next four months,” said airline data company OAG.

“But is this due to slightly weaker demand than expected, or is it due to the early response by some airlines to the prospect that the Omicron variant of the COVID-19 virus will return to border restrictions on international air travel? It’s too early to judge. “

By Koustav Samanta