How much will jet fuel demand impact global oil spare capacity?

Question

Accepted Answer

Jet Fuel Demand Poised to Significantly Reduce Global Oil Spare Capacity

A notable increase in jet fuel demand is expected to substantially diminish the oil industry's existing spare production capacity. This surge in demand, driven by the recovery of air travel, could eliminate the current buffer available to the market.
Jet Fuel Demand Lagging Behind Pre-Pandemic Levels

Currently, global jet fuel demand remains approximately 3 million barrels per day (bpd) below its 2019 levels. In 2019, the demand for jet fuel stood at 7.5 million bpd. The anticipated pickup in air travel is projected to bridge this gap.
Reduction in Spare Capacity

The oil industry's spare production capacity, which currently stands at 3-4 million bpd, provides a critical cushion for the market. This capacity allows producers to respond swiftly to unforeseen supply disruptions that could otherwise lead to significant price volatility.
Future Outlook for Spare Capacity

As jet fuel demand continues to recover and approach its pre-pandemic figures, the significant increase in consumption is anticipated to absorb the majority, if not all, of the industry's current spare capacity. This reduction in buffer capacity raises concerns about the market's ability to manage future supply shocks.

Reading history

Hide →

This history is cleared when the page is closed.

How much will jet fuel demand impact global oil spare capacity?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends