Data from global climate technology company Kayrros suggest increased jet fuel demand could increase beyond 20% year-on-year growth.
China’s reopening on 8 January after three years of Covid restrictions prompted a surge in air travel, leading to a doubling in Chinese jet fuel demand within a single week.
Despite accounting for just 6% of global oil demand in 2022, jet fuel demand is expected to have an outsize impact on global oil markets this year, the International Energy Agency has said. The IEA added that it may account for 45% of global oil demand growth of 1.9 bpd, as the wider aviation sector continues to recover from its Covid slump.
Jet fuel set to climb
Now Kayrros, a global climate technology company and a world leader in environmental intelligence, has said that jet fuel demand may keep climbing. The company, which supplies data and insights to organisations around the world, cited analysis of ADS-B data – signals from aircraft transponders.
According to current trends, aviation will be the main factor contributing to annual oil demand of over 100 million bpd for the first time, it added.
Kayrros’ president Antoine Rostand had already warned that China’s reopening would be “felt worldwide”.
“Jet fuel is a relatively ‘niche’ product, accounting for just 6% of global oil demand last year,” said Rostand.
“Our data shows it’s now up by more than 20% year on year. That’s a staggering jump. It will have an impact on the entire global oil market.
“We’re beginning to see the wider consequences of China’s reopening. As always during volatile times, high-quality information, in the form of real-time data, is essential.”
Though the aviation sector is recovering around the world, Asia is showing by far the strongest recovery, with annual growth of 36% in the second week of January. Though China has the largest aviation sector in the region, growth is also strong in Japan, South Korea and Australia, Kayrros said. Korean jet fuel demand in early January reached its highest level since February 2020.
In the US, the rise of e-commerce bolstered jet fuel demand for cargo planes at the peak of the pandemic. The re-diversification of the economy post-COVID could undermine this, Kayrros said. Amazon has been reported to be about to lay off more than 18,000 employees.
Earlier this month, Kayrros warned that the “freak” weather seen over the festive period could be a sign of things to come, as global warming continued to contribute to meteorological volatility.
Over the period beginning before Christmas until the end of the first week of January, highly abnormal weather patterns in North America and Europe led to extreme changes in energy demand.