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Jet Fuel Exports Hit Seasonal Lows as Middle East Disruptions Tighten Global Supply, Vortexa Says

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Global exports of jet fuel transported by sea fell for a second straight month in April to seasonal lows, as shipping disruptions in the Middle East and lower refinery activity across Asia tightened supplies worldwide, Ivan Mathews, head of APAC analysis at Vortexa, said in a Friday note.

Traffic through the Strait of Hormuz remained restricted, while refineries in Northeast Asia and on India's west coast reduced operations due to lower crude oil arrivals from the Middle East Gulf. Global seaborne jet fuel exports were down by 630,000 barrels per day compared with a year earlier.

Supplies are expected to improve in May and June, mainly because South Korea is likely to increase exports as crude oil imports recover to about 80% of pre-disruption levels. Higher refinery operating rates and strong profit margins for jet fuel production are expected to support additional exports.

China is also expected to increase shipments to buyers in the region, while exports from Taiwan may rise after Formosa's Mailiao refinery unit resumes operations following maintenance.

The increase in Asian supply is expected to weigh on jet fuel prices in the region, while tighter supply conditions on the US West Coast and in Northwest Europe are likely to encourage more long-distance shipments.

Jet fuel deliveries to the US West Coast fell to seasonal lows in April and are expected to decline further in early May, worsening supply tightness after Valero closed its Benicia refinery in California. Traders are expected to send more cargoes from South Korea to the US West Coast, a journey that takes about 18 days by sea.

Europe is also facing tighter conditions. Jet fuel imports into Northwest Europe are expected to fall by nearly 300,000 barrels per day in early May from a year earlier, while fuel inventories in the Amsterdam-Rotterdam-Antwerp storage hub have dropped below typical seasonal levels.

Despite an expected rebound in Asian exports, traders say the additional supply is unlikely to fully replace lost Middle East volumes in the near term, keeping jet fuel prices relatively high compared with other refined fuels.

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