According to industry sources and shiptracking data, refinery disruptions and lower exports from China curtailed supply, causing Asia’s imports of jet fuel from India to reach multi-year highs in November ahead of peak winter demand.
Since the commencement of the conflict in Ukraine in 2022, Indian refiners have been processing huge amounts of inexpensive Russian oil. Depending on arbitrage economics, they can increase fuel exports to either Europe or Asia. According to shiptracking data from LSEG, Kpler, and Vortexa, the amount of Indian aviation fuel arriving in hubs such as Singapore, Hong Kong, and Malaysia is expected to reach approximately 2.7 million barrels in November, up at least 40% from October. This is the greatest amount since Kpler started gathering the data in 2017.
As refineries reopen following maintenance, the surge in supply from India will contribute to the anticipated recovery in output within Asia. According to trade sources, buyers will want some time to process the cargoes, which could have an impact on spot pricing. The closing of the arbitrage window to Europe is most likely the cause of India’s shift to Asia for jet fuel.
According to Vortexa statistics, Malaysia’s jet fuel exports have reached multi-year lows of 150,000 barrels so far in November, while Japan is predicted to import 1.34 million barrels of kerosene and jet fuel, a nine-month high. Another trader who is shipping at least 450,000 barrels of petroleum to the United States in November claimed that traders selling more Asian cargoes to the west coast of the country amid profitable arbitrage earnings due to lower output there due to refinery disruptions made supply tighter.
September consumption levels in India were still 16% below pre-pandemic levels, citing a ready supply of India barrels due to higher production and weaker-than-expected demand for aviation fuel. The impact of lesser tax rebates that go into effect next month on Chinese exports and European demand will determine whether India’s jet fuel shipments to Asia stay high in December.
According to customs figures, China’s jet fuel exports fell to a 10-month low of 1.45 million metric tons (11.4 million barrels) in October. Similar amounts were predicted by trade sources for November. According to a China-based trade source, Chinese oil majors previously increased their exports of gasoline at the expense of jet fuel in order to increase profits. Meanwhile, because of limited export quota availability, China Aviation Oil, a major fuel provider, had issued rare tenders to purchase November spot cargoes.
