Jet fuel demand gets a thrashing until 2026

This analysis is from BloombergNEF. It appeared first on the Bloomberg Terminal.

The aviation sector consumed almost 8% of oil products globally in 2019, or almost 7.5 million barrels per day according to BloombergNEF’s 2020 Aviation Fuel Outlook. In 2020, Covid-19 has grounded much of the world’s aircraft, leading to almost a halving of fuel consumption. Long-term, however, appetite for air travel should continue to grow. With few alternatives and without significant policy intervention, air miles will continue to be powered by fossil fuels. This research note analyzes the key themes driving consumption of aviation fuels to 2050.

The impact of Covid-19 on jet fuel consumption will be felt until 2026, when demand will return to 2019 levels. Despite passenger air recovering to 2019 levels by 2024, and freight by 2023, the early retirement of older aircraft, like the Boeing 747 and Airbus A380, will lead to a more efficient fleet in operation. This will mean jet fuel producers like BP, Chevron and Shell will have to compete for a smaller demand pool until then.

Clients can find the report, “2020 Aviation Fuel Outlook”, on the Terminal or web.

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