Global Jet Fuel Demand Faces Slowdown Amid Economic Strains

Global jet fuel demand is set to decline as reduced consumer spending impacts travel budgets, potentially affecting oil prices in the coming months. The demand increase expected for this year might not materialize due to weaker-than-anticipated economic performance in major markets like the U.S. and China.

Global jet fuel demand is expected to decline as reduced consumer spending impacts travel budgets, potentially affecting oil prices in the coming months. The anticipated increase in demand this year may fall short due to weaker-than-expected economic performance in major markets such as the United States and China.

Jet fuel, which constitutes approximately 7% of global oil demand, was forecasted to be a key growth driver as travel rebounded from the pandemic. According to Goldman Sachs, global demand averaged 7.49 million barrels per day through July, marking a nearly 500,000-barrels-per-day increase compared to the same period last year.

However, this growth momentum appears uncertain. Statements from major U.S. airline operators and travel companies have highlighted concerns about slowing consumer spending, likely affecting leisure travel as disposable incomes shrink. U.S. consumer spending growth averaged just 0.3% in the three months through June, the slowest rate in over a year, according to the International Energy Agency (IEA).

(With inputs from agencies.)