Europe guzzles Asian jet fuel as summer travel season heats up

Asian shipments of jet fuel to Europe are soaring this month as summer holiday travel picks up and freight costs decline. Cargoes of petroleum products bound for Europe from South Korea, Singapore and China are set to rise to at least 450,000 tons in July, vessel-tracking data show. That’s the highest level since Bloomberg started tracking the shipments in November. All of the cargoes for this month are jet fuel. “As holiday demand is picking up, Europe needs more supplies,” said Ehsan Ul-Haq, an analyst at Resource Economist. Because the season runs until early September, “airlines have to stock up on the aviation fuel now.” The surge in jet fuel shipments illustrates the change in oil flows during the summer months, when Asian refiners typically export the most jet fuel to help feed seasonal growth in world travel. A drop in shipping rates in recent months has made trade on the route from the Far East to Europe increasingly profitable, also known as opening the arbitrage. Freight rates for Aframax-class tankers, which frequently haul as much as 90,000 tons of oil on the route, have declined to between $1.3m and $1.4m per trip, according to tanker fixture reports compiled by Bloomberg. Two months ago, those rates were around $1.5m per voyage.<br/>