EU Jet Fuel Imports Hit Record Low, Morgan Stanley Reports

Record Low Imports Signal Supply Tightening

Morgan Stanley has reported that jet fuel volumes destined for Northwest Europe have fallen to a record low of less than 200,000 barrels per day. This significant drop highlights growing pressure on the region's aviation fuel supply.

Supply and Production Overview

While most European Union refiners are operating at maximum production capacity, the shortfall is notable. Incremental imports from Africa and the United States, totaling 100,000 to 150,000 barrels per day, are insufficient to replace the approximately 300,000 barrels per day previously supplied by the Middle East to the EU and UK.

Impact on Aviation and Market Spreads

The supply constraints are expected to keep jet fuel crack spreads elevated. In response, several airlines have revised their capacity for the second quarter of 2026. Lufthansa has reduced capacity by 2.5%, while Wizz Air and Tui have cut capacity by 6% and 3% respectively. In contrast, Ryanair's capacity remains flat.

Outlook and Key Takeaways

The European jet fuel market faces continued supply tightness despite a temporary relief in March from US inflows. The capacity adjustments by major airlines underscore the industry's response to the challenging supply landscape. Observers will be monitoring whether alternative import sources can scale up to meet regional demand.

FAQ

Q: What is the main finding from the Morgan Stanley report?
A: Jet fuel imports into Northwest Europe have dropped to a record low, falling below 200,000 barrels per day.

Q: How are European airlines responding to the fuel shortage?
A: Major carriers like Lufthansa, Wizz Air, and Tui are reducing their flight capacity for Q2 2026, while low-cost carrier capacity overall remains up year-over-year.

Source: Investing.com