Australia and Japan face jet fuel supply crunch as China cuts exports

Qantas is already raising airfares as Australia faces a jet fuel supply crunch amid the US-Israel war on Iran.

Photo: AFP China’s exports of jet fuel have declined sharply in recent weeks amid the US-Israel war on Iran, leaving countries including Australia and Japan facing a supply crunch and scrambling to find alternative sellers.

China is Asia-Pacific’s largest jet fuel and kerosene exporter, but shipments from the country fell nearly 40 per cent month on month in March to 204,000 barrels per day, figures from trade data provider Kpler showed.

The cutback is likely to hit hardest in Australia and Japan, which are both heavily reliant on Chinese jet fuel, according to Kpler.

Other countries affected include Vietnam, Malaysia, the Philippines, Singapore, South Korea, Canada and the United States.

Global jet fuel prices have roughly doubled since the start of the war, soaring from US$99.40 per barrel during the last week of February to US$195.19 per barrel last week, according to data from market intelligence firm Platts.

The spike is already being felt across the aviation industry.

Passengers should expect 8 to 15 per cent higher fares plus larger fuel surcharges, as well as a decrease in flights as budget carriers cut routes, according to Osama Rizvi, a global market and product strategist at market intelligence firm Primary Vision.

Scott Charlton, chief executive of Sydney Airport, warned in early March that there were no guarantees that Australia’s airports would receive aviation fuel the following month, as the country remained overreliant on overseas supplies.

Australian Transport Minister Catherine King and Energy Minister Chris Bowen held talks with airlines including Qantas and Virgin Australia on March 12, seeking to reassure them that fuel supplies would hold up. “Australia will be able to source jet fuel from elsewhere, but it will be at a cost,” said Michael Feller, co-founder and chief strategist at consulting firm Geopolitical Strategy in Melbourne. “Australia’s limited refining capabilities have proven a strategic weakness and will be reflected in higher airfares and lower airline margins.” With less than 30 days of reserves remaining, Australia is scrambling to source jet fuel from South Korea, Taiwan, Singapore, Malaysia and India, but they are dealing with their own supply constraints, according to Rizvi. “Qantas is raising fares,” he said. “If new tankers don’t arrive in April, rationing is on the table, as we are already seein

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