Jet fuel crack spreads surged to a record $121 per barrel in March, straining airlines unable to hedge exposure amid supply disruptions.
Airlines face severe pressure from volatile jet fuel prices, with many lacking hedging strategies to mitigate costs. The jet fuel crack spread in North West Europe hit a record $121 per barrel in March, up from $30 before late February, driven by supply constraints and geopolitical tensions.
The Middle East, a key jet fuel supplier, has seen production and exports disrupted by the closure of the Strait of Hormuz and attacks on energy infrastructure. Demand destruction is emerging as airlines cancel flights and some airports experience fuel shortages, risks that may escalate if the conflict persists.
While some carriers with robust hedging programs gain partial protection, the broader industry remains vulnerable to sustained price swings and supply chain disruptions.