South Korea jet fuel exports rebound in May to pre-war levels
- May exports at nine-month high of about 1.15 MM tons (t)
- May and June refining runs to average 2.4 MMbpd
- Wider Asia-U.S. West Coast arbitrage to encourage production, exports further
South Korea's refiners boosted jet fuel exports in May back to pre-Iran war levels, helped by a recovery in crude imports and encouraged by robust refining margins, analysts and trade sources said.
The rebound from one of Asia's top fuel exporters, seen in a slew of spot cargo sales, has helped ease concerns about tight supply and done much to cool prices in the region.
Spot premiums for the aviation fuel have plunged 50% to around $2 a barrel over the past two weeks. That compares with a record high of more than $20 in March.
South Korea is estimated to have shipped out between 1.1 MMt and 1.2 MMt (8.67 MMbbl to 9.46 MMbbl) of jet fuel in May, the highest level since August, data from Kpler, Vortexa and a trade source showed.
According to Kpler, May volumes surged 36% from a one-year low marked in April. Its data also shows that South Korean shipments have accounted for 30% of jet fuel imports in Asia Pacific for the year so far, up from 23% for all of 2025.
In addition to the sharply lower premiums for aviation fuel, regrade spreads between 10 ppm sulfur diesel and jet fuel have flipped to slight discounts, LSEG data showed.
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MORE CRUDE, HIGHER REFINING OUTPUT. The U.S.-Israeli war on Iran has led to a de facto blockade of the Strait of Hormuz, through which a fifth of the world's oil shipments used to pass, and the disruptions in crude supply have resulted in lower runs for Asia's refiners.
But South Korean refineries' crude imports recovered to around 80% of pre-disruption levels in May, said Vortexa's head of APAC analysis Ivan Mathews, adding that he expects them to increase jet fuel exports in June due to higher refining output.
Average crude runs for the country's refineries in May and June are estimated to be higher than April at 2.4 MMbpd or more, although they remain lower than pre-war levels of 2.9 MMbpd, said FGE NexantECA senior analyst Samuel Kong.
South Korea's refining throughput stood at 2.18 MMbpd in April, government data showed.
Crude arrivals at the world's fourth-largest importer rebounded in May to 2.27 MMbpd after hitting 1.51 MMbpd in April, the lowest since 2013, according to Kpler data, with volumes mostly from Saudi Arabia, the U.S. and the United Arab Emirates.
HIGHER U.S. WEST COAST PRICES ENCOURAGE EXPORTS. A fifth of South Korean jet fuel exports in May were bound for the U.S., according to Kpler data, with traders expecting June volumes to hold steady.
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Vortexa's Mathews said arbitrage is favorable for South Korean refiners to send jet fuel to the U.S. West Coast, which could lead to higher production and exports.
U.S. West Coast jet fuel swap prices have been trading at over $20 a barrel higher than those for Asia since end-May, Reuters calculations showed, up from $10 a barrel higher two weeks ago.
Costs to ship around 300,000 bbl of refined fuels on this route were at $7 a barrel, SSY pricing data on LSEG showed.
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