Early in 2023, the revival of aviation gained steam as the Chinese economy started to open again. Everyone who has travelled will have observed that there are more airline options available in addition to the fact that aeroplanes are flying at capacity. What was a daily flight is now a three times per week service. And there are now two flights every day instead of the previous one, as reported by Bloomberg.
Jet fuel
For the first time since the pandemic shut down the sector, the volume of commercial flights has consistently topped 2019 levels. FlightRadar24 data show that starting February 6, the seven-day rolling average flight count has been higher than the level for 2019. The seven-day average now stands at 109,330 flights, up from 105,724 four years ago, according to the most recent figures.
But, the rebound hasn’t caused the use of jet fuel to reach a new high. The Airbus A350 and the Boeing 787 are two examples of the more fuel-efficient aircraft that have replaced gas guzzlers in the aviation sector.
Recover flights
The recovery in the number of daily flights is disproportionately skewed towards national and regional routes, which use less fuel than long-haul, trans-continental routes, which is another reason why the demand for jet fuel is still below pre-pandemic levels. Flights to and from Asia in particular are still significantly below their pre-pandemic levels. The trans-Pacific route, which consumes a lot of jet fuel, has not yet recovered.
Global jet fuel demand is expected to increase to an average of roughly 7.2 million barrels per day in 2023, up from 6.1 million barrels per day in 2022 and 4.7 million barrels per day in 2020, according to the International Energy Agency. The amount of jet fuel consumed in 2019 reached a record high of 7.9 million.
Pre-pandemic consumption
The last component of the oil barrel to return to, or at least equal, its pre-pandemic consumption level is jet fuel. Several significant refined product demands have already surpassed that of 2019 levels, such as LPG, naphtha, diesel, and fuel oil. And despite the rising popularity of electric vehicles, gasoline consumption will almost probably rise to meet its pre-pandemic level this year.
But jet fuel won’t be left behind for long. Pent-up demand, particularly in Asia, is a powerful force, and by 2024, it’s conceivable that jet fuel consumption will have reached a record high. Every component of the oil barrel will be more expensive at that time than they were in 2019. An increase in oil demand has returned.
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Source: Bloomberg
