Global Jet Fuel Oil Market Size, Share and Industry Analysis Report By Fuel Type(Jet A Fuel Oil, Jet A-1 Fuel Oil, Jet B Fuel Oil), By Supply Chain(Upstream, Refining, Distribution), By Application(Commercial, Defense, General Aviation, Civil, Private), By Region, and Key Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033
- Published date: Oct 2024
- Report ID: 130465
- Number of Pages:
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Report Overview
The global Jet Fuel Oil Market size is expected to be worth around USD 43.0 billion by 2033, from USD 11.3 billion in 2023, growing at a CAGR of 14.3% during the forecast period from 2023 to 2033.
The jet fuel oil market refers to the global industry and trade surrounding aviation turbine fuel, a type of aviation fuel used specifically in aircraft powered by gas-turbine engines. This market is pivotal for both commercial and military aviation sectors, where jet fuel is a major operational expense and a critical component for air travel and transport. The market encompasses a variety of activities including production, pricing, trading, and regulation of jet fuel.
Key factors influencing this market include the fluctuations in crude oil prices, advancements in fuel technology such as the development of sustainable aviation fuels, and changing regulations that impact fuel specifications and environmental compliance. The market is also segmented based on different types of jet fuels and their applications across various regions globally, reflecting differing needs based on climate, aircraft type, and local regulations.
The market demand for jet fuel is experiencing a significant recovery as global travel channels reopen and economies, especially China’s, continue to recover from the pandemic-related downturns. In 2023, jet fuel consumption in the U.S. saw a substantial peak, indicating a strong resurgence in demand, particularly during peak travel times like the post-Thanksgiving period. This rebound is mirrored globally with the International Air Transport Association forecasting an increased average cost of jet fuel in 2024.
The popularity of jet fuel oil in the market has seen significant shifts, primarily driven by a resurgence in global air travel and the ongoing economic recovery, especially in major economies like China. As air travel returns to levels seen before the pandemic, the demand for jet fuel is poised for substantial growth. The commercial aviation sector, in particular, is spearheading this demand, with the International Air Transport Association highlighting the sector’s rapid expansion and increased number of air passengers as key drivers.
Governments worldwide are facilitating the transition towards more sustainable jet fuel options through subsidies and regulatory support. The European Union’s Green Deal and the U.S.’s Sustainable Skies Act are examples of initiatives aimed at reducing aviation’s carbon footprint by promoting the adoption of SAF through various incentives, including tax credits and research funding.
Significant investments are being made in refining capacity and the development of sustainable aviation fuels (SAF). The U.S. Department of Energy, for example, announced funding of $100 million in 2023 to support projects that reduce emissions from airplanes and ships, including innovations in SAF. Private sector investments also align with this, as seen with major oil companies and airlines committing billions to develop and integrate SAF into their fuel mix.
Key Takeaways
- Jet Fuel Oil Market size is expected to be worth around USD 43.0 billion by 2033, from USD 11.3 billion in 2023.
- Jet A Fuel Oil held a dominant market position, capturing more than a 53.2% share.
- Refining held a dominant market position, capturing more than a 46.6% share in the jet fuel oil supply chain.
- Commercial segment held a dominant market position in the jet fuel oil market, capturing more than a 64.5% share.
- North America, holding a dominant share of 39.3% and valued at USD 4.4409 billion.
By Fuel Type
In 2023, Jet A Fuel Oil held a dominant market position, capturing more than a 53.2% share. This fuel type is primarily used in the United States and is favored for its high freeze point properties, which make it suitable for flying under varying climatic conditions. Jet A’s wide usage across commercial airlines in North America contributes significantly to its market prominence.
Jet A-1 Fuel Oil, with its lower freezing point than Jet A, is preferred internationally, especially in regions with colder climates. It is the standard fuel type for international flights and is widely used across Europe, Asia, and other parts of the world. Its formulation allows for safer and more efficient performance in the colder temperatures encountered at high cruising altitudes.
Jet B Fuel Oil, known for its wide cut and enhanced cold-weather performance, is less commonly used but crucial in specific markets like Canada and some parts of the United States. Its ability to operate at lower temperatures without gelling makes it indispensable for aircraft operating in extremely cold environments. Despite its niche application, Jet B is vital for regions where the temperature can significantly impact fuel performance.
By Supply Chain
In 2023, Refining held a dominant market position, capturing more than a 46.6% share in the jet fuel oil supply chain. This segment is crucial as it involves the processing of crude oil into jet fuel, which requires sophisticated technology and significant investment. The refining process determines the quality and efficiency of the fuel, making it a critical step in ensuring safe and efficient air travel.
Upstream activities, which involve the exploration and extraction of crude oil, also play a vital role but are less directly connected to the final jet fuel product. Despite this, the upstream segment is essential for providing the raw materials necessary for refining and ultimately influences pricing and availability in the downstream markets.
Distribution is the final step in the jet fuel oil supply chain, involving the transportation and storage of the refined fuel to airports and other facilities. While essential, its market share is smaller compared to refining, as the main value-add occurs during the conversion of crude into usable jet fuel. Efficient distribution networks are critical to ensuring that the right quantities of jet fuel are available at the right locations to meet airline demand.
By Application
In 2023, the Commercial segment held a dominant market position in the jet fuel oil market, capturing more than a 64.5% share. This sector includes all commercial airline operations that transport passengers and cargo globally. The vast demand in this segment is driven by international travel and global trade, necessitating a continuous and robust supply of jet fuel to maintain operations and efficiency.
The Defense segment, while smaller, is critical, focusing on fuel for military aircraft used in defense and security operations. This segment demands specialized jet fuels that can perform under extreme conditions and often includes additives to improve performance and safety.
General Aviation encompasses a broad range of non-commercial aircraft activities, including flight training, emergency services, and personal aviation. This segment uses a significant amount of jet fuel, reflecting the diverse nature and volume of flights handled.
Civil aviation, similar to commercial but typically involving governmental or official use, also plays a vital role but on a more controlled scale. These operations include state or official transport services, which require high reliability and punctuality.
Private segment, which includes private jets and small aircraft owned by individuals or corporations, although niche, reflects significant personalized demand for jet fuel. This segment caters to the luxury market, where convenience and customization are highly valued.
Key Market Segments
By Fuel Type
- Jet A Fuel Oil
- Jet A-1 Fuel Oil
- Jet B Fuel Oil
By Supply Chain
- Upstream
- Refining
- Distribution
By Application
- Commercial
- Defense
- Aviation
- Civil
- Private
Drivers
Resurgence of Global Travel Post-Pandemic: One of the most significant driving factors for jet fuel oil in 2023 is the robust resurgence of global air travel as economies recover from the pandemic’s impacts. This recovery is most notably seen in markets like China, where the lifting of COVID-19 restrictions has led to a surge in both domestic and international travel. The International Energy Agency reports that this resurgence is expected to contribute significantly to global oil demand, with jet fuel demand anticipated to grow substantially by 840 kb/d in 2023, making it one of the largest contributors to the overall increase in oil demand.
Economic and Population Growth: Economic expansion and population growth are also pivotal, driving increased energy consumption, which includes jet fuel. The U.S. Energy Information Administration (EIA) underscores that global economic and population growth, particularly in regions like Asia-Pacific, are significant drivers of increased jet fuel consumption. As these economies expand, there is a higher demand for both passenger and freight air transport, which in turn boosts jet fuel demand.
Expansion of Airline Capacities and Routes: Airlines are expanding their capacities and routes, especially in emerging markets, which directly increases jet fuel consumption. This expansion is supported by both the growing middle class in large economies such as India and China and the increasing connectivity between global cities. The IEA highlights that the global aviation sector is expected to continue its strong growth trajectory, with airline travel returning to pre-pandemic levels and jet fuel demand surging accordingly.
Government and Industry Initiatives: Governments and the aviation industry are heavily investing in infrastructure and fleet expansion, which further stimulates jet fuel demand. These investments are often supported by policies aimed at enhancing air transport connectivity and capacity. For example, significant investments in airport infrastructure development across Asia and Africa are expected to enhance operational capacities and thus increase jet fuel usage.
Restraints
Tight Supply Amid Refinery Constraints
A significant restraining factor currently affecting the jet fuel oil market is the tightening of supply, primarily due to refinery constraints and operational challenges. This situation has been exacerbated by a variety of global economic and operational factors that have limited refinery output and influenced market dynamics.
Jet fuel supply has been particularly impacted by the preference of refineries to prioritize the production of diesel and gasoline over jet fuel. This prioritization is due to higher margins and demand for these products compared to jet fuel, which has not fully recovered its demand to pre-pandemic levels. The shift in refinery production preferences has led to limited availability of jet fuel, contributing to rising prices and supply constraints in the market.
Additionally, global economic conditions, including the impact of geopolitical events and economic policies, have led to fluctuations in crude oil prices, which directly affect jet fuel prices. Recent data indicates a surge in global crude prices due to tightening supplies, influenced by OPEC+ cuts and other supply-side limitations. For instance, a near $11 per barrel increase in crude prices was noted in one of the reports, reflecting the tight supply environment which directly impacts jet fuel prices.
Operational challenges such as extreme weather conditions and planned maintenance have also played a critical role. For example, heatwaves in key refinery locations like Texas and Louisiana have caused outages and reduced output during peak utilization periods. Furthermore, the upcoming refinery maintenance seasons are expected to add more pressure on the already constrained supply lines, potentially leading to further decreases in jet fuel production.
These factors collectively contribute to a tight supply environment for jet fuel, which not only pushes prices higher but also makes it difficult for airlines and other end-users to secure adequate supplies. This situation is likely to continue affecting the jet fuel market, restraining its growth and recovery, especially as air travel demand tries to rebound to pre-pandemic levels.
Opportunity
Sustainable Aviation Fuel (SAF)
The expansion of sustainable aviation fuel (SAF) represents a significant growth opportunity for the jet fuel oil market over the next few decades. This growth is driven by increasing regulatory pressures to reduce greenhouse gas emissions and the aviation industry’s commitment to decarbonizing its operations.
Increasing Demand and Regulatory Support: Governments and international bodies are setting ambitious targets for reducing aviation emissions, which is catalyzing the shift from conventional jet fuels to SAFs. For example, under current policies and commitments, the demand for sustainable fuels in the aviation sector is expected to grow substantially. By 2050, total demand for sustainable fuels could reach up to 600 million tonnes per annum in scenarios where existing commitments are fully achieved.
Investment and Capacity Expansion: To meet the projected demand, significant investments are anticipated in the production of sustainable fuels. From 2030 onwards, after current production capacities for bio-based fuels such as Hydrotreated Vegetable Oil (HVO) reach their limits, investment will likely shift towards more advanced biofuels and synthetic fuels technologies.
Technological Advancements and Economic Incentives: Advances in technology and increasing financial incentives are making SAF more viable. These fuels are designed to be dropped into existing fuel infrastructure without modifications, facilitating their adoption. The European Union and North America are projected to lead in investments, focusing on creating more efficient and cost-effective production methods.
Market Readiness and Flexibility: The jet fuel market is preparing for a more flexible production capacity that can adjust to changing demands between traditional diesel and jet fuel to SAF, depending on market needs. This adaptability will be crucial as the demand for different types of fuel fluctuates during the transition to lower-carbon alternatives.
Trends
Surge in Demand Post-COVID Recovery
A significant trend in the jet fuel oil market in 2023 has been the sharp increase in demand, driven primarily by the rebound in global air travel as the world recovers from the COVID-19 pandemic. This surge reflects a broader trend across the oil sector, with jet fuel demand notably leading the gains in global oil consumption.
According to the International Energy Agency (IEA), global demand for jet kerosene is expected to increase by a massive 1.2 million barrels per day in 2023. This increase is largely fueled by the rapid recovery of domestic air travel in China and a prolonged recovery from the pandemic’s impact on the aviation industry.
The U.S. market has seen similar trends, with jet fuel production climbing to 1.9 million barrels per day at the start of August 2023, marking an 8% increase from the previous year. This rise is in line with the growth in passenger numbers recorded by the Transportation Security Administration (TSA), which showed a 6.2% increase in the first seven months of 2024 compared to the same period in 2023.
The increase in air travel has been substantial enough that Airlines for America projected an addition of 26,000 scheduled flights per day to meet demand
This trend indicates not only a recovery to pre-pandemic levels but also a potential for new growth peaks as the industry continues to adjust to returning demand and evolving consumer behavior in travel. As global and domestic travel continues to rebound, the demand for jet fuel is expected to remain robust, influencing refineries’ production schedules and possibly affecting global oil markets in terms of pricing and distribution strategies.
Regional Analysis
North America, holding a dominant share of 39.3% and valued at USD 4.4409 billion, is a leading player due to its extensive aviation activities and advanced fuel technologies. The region benefits from a strong infrastructure and a high volume of both passenger and cargo flights.
Europe follows with significant demand driven by stringent environmental regulations pushing for cleaner aviation fuels. This region’s focus on reducing carbon emissions influences both market strategies and technological advancements in jet fuel production.
Asia Pacific is experiencing the fastest growth, fueled by increasing air travel in countries like China and India. This region’s expanding middle class and growing economic prowess make it a pivotal market for future expansion.
Middle East & Africa have a steady demand linked closely to the oil-rich economies’ export activities. The Middle East, with its strategic geographic position, serves as a critical hub for international flights, thereby sustaining substantial jet fuel consumption.
Latin America, while smaller in comparison, is seeing growth due to increasing tourism and business travel, necessitating expanded aviation services and fuel supply chains.
North America’s leadership in the market is underscored by its substantial market share and valuation, driving trends and setting standards for other regions to emulate.
Key Regions and Countries
- North America
- The US
- Canada
- Europe
- Germany
- France
- The UK
- Spain
- Italy
- Russia & CIS
- Rest of Europe
- APAC
- China
- Japan
- South Korea
- India
- ASEAN
- Rest of APAC
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- Middle East & Africa
- GCC
- South Africa
- Rest of MEA
Key Players Analysis
The jet fuel oil market features a dynamic competitive landscape with major players spread across various segments of the industry. Key companies such as Exxon Mobil Corporation, Royal Dutch Shell PLC, and Chevron Corporation are renowned for their extensive operations and robust supply chains globally.
These companies, along with others like British Petroleum (BP) PLC and Total SA, play pivotal roles in shaping market dynamics through innovations in fuel technology and sustainable practices. China Aviation Oil and Sinopec Corp are significant in the Asia-Pacific region, capitalizing on the region’s rapid growth in air travel.
Other notable entities like Neste Oil, known for their advancements in sustainable jet fuels, and World Fuel Services, which specializes in fuel procurement and logistics, highlight the diverse capabilities and strategic focuses within the market. This diverse array of players underscores the market’s competitive nature and its global reach, influencing both regional and international market trends.
Market Key Players
- Air BP
- British Petroleum (BP) PLC
- Chevron Corporation
- China Aviation Oil
- Eon Mobil
- Exxon Mobil Corporation
- Gazprom
- Hascol Petroleum
- Hengli Petrochemical
- Honeywell UOP
- Indian Oil Corporation Ltd.
- JSC Ukrtatnafta
- Mercury Air Group
- Neste Oil
- Oman Oil Company SAOC
- Petroleo Brasileiro SA (Petrobras)
- Phillips 66
- Public Joint Stock Company Gazprom
- Qatar Jet Fuel Company
- Royal Dutch Shell PLC
- SATORP
- Shell
- Sinopec Corp.
- Total SA
- Vitol
- World Fuel Services
Recent Development
In 2023, Air BP expanded its operations in the sustainable fuel realm by enhancing its infrastructure to blend and supply SAF in the UK. This initiative uses synthetic paraffinic kerosene (SPK) derived from hydrogenated used cooking oil, blended with traditional jet fuel.
In 2023, BP demonstrated its commitment to this transition by expanding its operations to include more sustainable practices, such as blending and supplying SAF in the UK. This approach utilizes synthetic paraffinic kerosene (SPK) made from used cooking oils, blended with conventional jet fuels, underscoring BP’s efforts to reduce the lifecycle carbon emissions of aviation fuels.
Report Scope
Report Features Description Market Value (2023) US$ 11.3 Bn Forecast Revenue (2033) US$ 43.0 Bn CAGR (2024-2033) 14.3% Base Year for Estimation 2023 Historic Period 2020-2022 Forecast Period 2024-2033 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Fuel Type(Jet A Fuel Oil, Jet A-1 Fuel Oil, Jet B Fuel Oil), By Supply Chain(Upstream, Refining, Distribution), By Application(Commercial, Defense, General Aviation, Civil, Private) Regional Analysis North America – The US & Canada; Europe – Germany, France, The UK, Spain, Italy, Russia & CIS, Rest of Europe; APAC– China, Japan, South Korea, India, ASEAN & Rest of APAC; Latin America– Brazil, Mexico & Rest of Latin America; Middle East & Africa– GCC, South Africa, & Rest of MEA Competitive Landscape Air BP, British Petroleum (BP) PLC, Chevron Corporation, China Aviation Oil, Eon Mobil, Exxon Mobil Corporation, Gazprom, Hascol Petroleum, Hengli Petrochemical, Honeywell UOP, Indian Oil Corporation Ltd., JSC Ukrtatnafta, Mercury Air Group, Neste Oil, Oman Oil Company SAOC, Petroleo Brasileiro SA (Petrobras), Phillips 66, Public Joint Stock Company Gazprom, Qatar Jet Fuel Company, Royal Dutch Shell PLC, SATORP, Shell, Sinopec Corp., Total SA, Vitol, World Fuel Services Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three licenses to opt for: Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF) - Air BP
- British Petroleum (BP) PLC
- Chevron Corporation
- China Aviation Oil
- Eon Mobil
- Exxon Mobil Corporation Company Profile
- Gazprom
- Hascol Petroleum
- Hengli Petrochemical
- Honeywell UOP
- Indian Oil Corporation Ltd.
- JSC Ukrtatnafta
- Mercury Air Group
- Neste Oil
- Oman Oil Company SAOC
- Petroleo Brasileiro SA (Petrobras)
- Phillips 66
- Public Joint Stock Company Gazprom
- Qatar Jet Fuel Company
- Royal Dutch Shell PLC
- SATORP
- Shell
- Sinopec Corp.
- Total SA
- Vitol
- World Fuel Services
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