Europe faces Q4 jet fuel supply deficit even as South Korea becomes latest big supplier

• Energy Aspects forecasts Europe's Q4 jet fuel deficit at 510,000 bpd, contrasting with surpluses of 18,000 bpd in the U.S. and 419,000 bpd in Asia-Pacific
• South Korea's jet fuel output hit a seven-year high of 13.89 million barrels in July, with refinery crude processing rates up 16% from June to 2.7 million bpd
• Jet fuel stocks in Amsterdam-Rotterdam-Antwerp hub reached their lowest level in seven years as of September 10, while widening price spreads between Asian and European benchmarks make exports to Europe more profitable

Europe Faces Q4 Jet Fuel Supply Deficit Despite Increased South Korean Imports

Europe is confronting a severe fourth-quarter jet fuel shortage, with Energy Aspects forecasting a deficit of 510,000 barrels per day (bpd), despite diversifying supply sources following disruptions from the Iran war that began over six months ago.

Key Supply Developments

South Korea has emerged as a major supplier, with September exports to Europe reaching approximately 129,000 bpd—the highest level since October 2022. This follows increased refinery output, with South Korean jet fuel production hitting a seven-year high of 13.89 million barrels in July. The country's crude processing rates also rose 16% month-over-month to 2.7 million bpd in July.

Market Pressures

The Middle East conflict has eliminated roughly half of Europe's traditional jet fuel imports, forcing the continent to source supplies from Nigeria, the United States, Canada, and now South Korea. Jet fuel inventories at the Amsterdam-Rotterdam-Antwerp (ARA) hub—Europe's key storage facility—fell to seven-year lows in the week ending September 10.

Regional Supply Imbalance

While Europe faces shortages, other regions show surpluses. Third and fourth-quarter forecasts project an 18,000 bpd surplus in the United States and 419,000 bpd surplus in Asia-Pacific, creating arbitrage opportunities that make European imports profitable.

Price Impact

European diesel reached record highs this week, with widening spreads between Asian and European benchmarks encouraging continued exports to Europe. Analysts expect imports to persist as the continent remains structurally short on jet fuel supplies, with ongoing Middle Eastern tensions presenting additional supply risk.