US Refiners Boost Jet Fuel to Near Record Levels

Why It Matters

The surge in jet fuel output and price volatility reshapes refinery economics and airline cost structures, signaling tighter margins for carriers and sustained profit opportunities for U.S. refiners through 2026.

Key Takeaways

• US jet fuel output exceeds 2 mn b/d, near July 2024 record
• Production rose 290,000 b/d since Feb 28 conflict began
• Marathon added 30,000 b/d capacity; Valero boosting yields above 30%
• HF Sinclair can shift 7,000 b/d between diesel and jet fuel
• Jet fuel price forecast $3.33/USG in 2026, 74% higher than pre‑war

Pulse Analysis

The escalation of the Iran‑Israel conflict has choked the Strait of Hormuz, cutting off traditional oil and product flows and prompting U.S. refiners to pivot toward jet fuel. By expanding crude runs and fine‑tuning distillation cuts, facilities like Marathon’s Garyville plant and Valero’s integrated system have lifted output to near‑record levels. This strategic shift not only fills the supply gap for airlines but also leverages higher margins that are expected to persist through 2026, reinforcing the United States’ role as a critical jet fuel hub for both domestic and export markets.

Airlines are confronting unprecedented cost pressures as jet fuel prices surged to $4.73 per US gallon in early April, the highest since Argus began tracking in 1994. The ripple effect is evident in capacity decisions: United plans a 5% cut in 2026, Delta is holding flights flat, and American projects a $4 billion cost increase. The most dramatic outcome was Spirit Airlines’ shutdown, underscoring how sustained fuel price spikes can threaten carrier viability, especially for low‑cost operators with thin margins.

Looking ahead, refiners are betting on continued profitability, with the EIA forecasting a 74% price uplift from pre‑war levels. Projects that enable flexible feedstock switching, such as HF Sinclair’s 7,000 b/d diesel‑jet swing, provide a hedge against future disruptions. Meanwhile, European markets are turning to North American jet fuel to offset Middle‑East supply shortfalls, creating export opportunities for U.S. and Canadian producers. Stakeholders should monitor geopolitical developments and refinery investment cycles, as they will dictate the balance between supply adequacy and price stability in the global aviation fuel landscape.