Two lines showing monthly US jet production and demand.

Trump says the US has too much jet fuel for Europe, the market disagrees

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  • US jet fuel supplies are well short of the Hormuz supply gap
  • The US is a major consumer of jet fuel and often requires imports
  • Higher imports could raise US jet fuel prices
NEW YORK, April 1 (Reuters) – President Donald Trump this week told countries that are struggling to get jet fuel because of Iran’s blockade of the Strait of Hormuz to buy from the US, but analysts say there is a big problem with his advice: the US will not cover the global shortage.

“We have a lot,” Trump wrote in a Public Truth post on Tuesday.

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US government data suggests otherwise.

About half a million barrels a day of jet fuel are exported through the Strait of Hormuz, mostly to Europe and some to Asia and Africa, data from Kpler ship tracking services show.

Total US jet fuel sales, meanwhile, were 219,000 bpd last year, data from the Energy Information Administration, the Energy Department’s statistical arm, show.

“It is very unlikely that the US can replace the Strait of Hormuz supply,” Kpler analyst Matt Smith said.

SERVICE EXPERT

The United States is the largest consumer of jet fuel in the world, and most of the jet fuel that the country produces is consumed domestically, the EIA shows.

Last week, fuel refiners and blenders produced 1.97 million bpd of jet fuel, which was above demand of 1.79 million bpd, the EIA reported.

“Even if the US had a lot of jet fuel, it has a lot of airplanes,” Smith said.

In addition, most of the US jet fuel production is concentrated on the US Gulf Coast, and the major demand centers along the East Coast and West Coast have been dependent on imports to cover their needs.

The West Coast in particular will need more oil supplies from the US Gulf Coast as many of its Asian suppliers are among those most affected by the closure of the Strait of Hormuz. Asian refiners were forced to cut production and freeze exports, leaving California to find other suppliers.
Two lines showing monthly US jet production and demand.

HIGH FUNDS THAT RAISE PRICES FOR US BUILDERS

In fact, the US exports a lot of fuel products, including jet fuel, to world markets as it is the largest fuel producer not directly affected by the war.
Jet fuel prices have increased in the United States since the start of the Iran war, but to a lesser extent than in other markets affected by the Strait of Hormuz blockade, which encourages higher exports, said Tom Kloza, chief energy consultant at Gulf Oil.

At least four to five cargoes of jet fuel and diesel were loaded in the New York Harbor area for delivery to Europe, reversing the normal flow that sees these products from Europe to the US East Coast, Kloza said.

Jet fuel prices are between $4 and $5 a gallon in most parts of the United States, according to GasBuddy data. By comparison, the average cost of jet fuel on the US Gulf Coast is between $2.50 and $3 a gallon, said Patrick De Haan, head of gasoline analysis at GasBuddy.

However, higher import demand will result in further price increases for US consumers, which is a major challenge for the Trump administration, said De Haan.

“When there is more demand for jet fuel in the US, the price will be very high. It’s like the more hands in the cookie jar, the fewer cookies,” De Haan said.

Reporting by Shariq Khan in New York; Edited by Sonali Paul

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