Refiners in South Korea remain unlikely to post any meaningful recovery in aviation fuel exports for the rest of 2021, as the COVID-19 pandemic continues to impact international air travel.
Major Asian transportation fuel suppliers do not expect to see international air travel normalise this year, although strong air cargo demand may offer some respite to jet fuel sales.
Demand from Asia and the US normally makes up the bulk of South Korea’s aviation fuel exports, but sales to these markets plunged to one-third of levels seen before the pandemic outbreak. For major South Korean refiners, including SK Innovation and S-Oil, the outlook is reported to remain downbeat for the rest of the year.
Sales of fuel could be boosted by a speedy rollout of the COVID-19 vaccination program worldwide, but the current slow pace of the vaccination process and a resurgence in infections in countries like India and Japan, on top of movement restrictions across east Asia, paint bleak outlook for the aviation industry and jet fuel trades, the officials from SK and S-Oil told S&P Global Platts.
According to data from Korea National Oil Corp, South Korea exported 10.9 million barrels of jet fuel in the first quarter, down 11 percent from 12.2 million barrels exported in fourth-quarter 2020, and sharply lower than the average 28.7 million barrels/quarter in 2019.
Data released by Hong Kong’s Cathay Pacific airlines showed that in March the Asian carrier flew a total 18,539 passengers in the month, a decrease of 94 percent from a year earlier.
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