Jet Fuel Price Volatility Threatens Aviation Industry

Jet fuel is a highly specialized and volatile product that plays a crucial role in the aviation industry. It's often called Jet A1 or AVTUR, and it comes from a refinery's Crude Distillation Unit (CDU). Unlike gasoline, which boils first and has a more explosive nature, kerosene is used to power aeroplanes due to its perfect balance of stability and combustibility.

Refinery yields vary depending on the type of crude processed, but generally, 1 barrel of Brent Crude produces around 25 litres (15% yield) of jet fuel. Certain refining processes can increase this yield, but they're technically difficult and expensive. This means that jet fuel is not a ubiquitous product like gasoline or diesel.

The weak supply position combined with strong demand dynamics makes jet fuel prone to rapid price shocks. In Europe, the situation is exacerbated by a lack of indigenous production and an over-reliance on imports. The price volatility has been illustrated in 2026, where the price of jet fuel went up to $234 per barrel ($1,842.50 / tonne) after the Israeli and US attacks on Iran.