South Korea Jet Fuel Exports Rebound as Crude Supplies Recover

Why It Matters

The surge re‑establishes South Korea as a key jet‑fuel supplier in Asia‑Pacific, stabilising aviation fuel prices and bolstering refiners’ earnings amid geopolitical supply disruptions.

Key Takeaways

• May jet fuel exports reached 1.1‑1.2 million tonnes.
• Exports rose 36% from April's low.
• South Korea supplied 30% of Asia‑Pacific jet fuel imports YTD.
• Crude imports recovered to ~80% of pre‑war levels.
• US West Coast jet fuel swaps $20/barrel above Asia.

Pulse Analysis

The ongoing US‑Israeli conflict over Iran has throttled oil flows through the Strait of Hormuz, a chokepoint that once handled roughly 20% of global crude shipments. Asian refiners felt the pinch as crude arrivals fell sharply, prompting lower run rates and tighter fuel markets. South Korea, the world’s fourth‑largest crude importer, managed to restore its crude intake to about 80% of pre‑disruption volumes by May, positioning its refineries to capitalize on the supply gap. This recovery also underscores South Korea’s strategic diversification of supply sources, including Saudi Arabia, the United States and the UAE.

In May, that operational recovery translated into a sharp jump in jet fuel exports, with shipments climbing to between 1.1 million and 1.2 million tonnes – the strongest flow since August. The surge represented a 36% increase from April’s trough and lifted South Korea’s share of Asia‑Pacific jet fuel imports to roughly 30% year‑to‑date, up from 23% a year earlier. At the same time, spot premiums collapsed by half, falling to about $2 per barrel, which helped temper regional aviation fuel price spikes.

The price differential between the US West Coast and Asian markets now exceeds $20 per barrel, creating a lucrative arbitrage incentive for South Korean refiners to ship fuel westward. Shipping costs of roughly $7 per barrel for a 300,000‑barrel cargo keep the trade margin attractive, and analysts expect June exports to hold steady, especially to the United States. For airlines, the renewed supply flow should ease jet fuel cost pressures, while refiners benefit from higher refining spreads and a more resilient crude feedstock pipeline amid ongoing geopolitical uncertainty.