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Today in Energy

September 2, 2020

Demand for jet fuel in the U.S. is recovering faster than in many other markets

ratio of 2020 jet fuel consumption by commercial passenger jets to 2019 consumption
Source: U.S. Energy Information Administration, using raw flight data from Cirium
Note: China* inclusive of Hong Kong and Macau; consumption assigned to the region from which each flight departed.

U.S. jet fuel consumption has been particularly affected by responses to the 2019 novel coronavirus. However, analysis of flight-level data provided by Cirium on commercial passenger flights—a category of aircraft that the U.S. Energy Information Administration (EIA) estimates accounted for 73% of total U.S. jet fuel consumption in January 2020—suggests that demand for jet fuel in the United States has, so far, recovered faster than in many other major aviation markets.

EIA estimates that as of August 16, 2020, consumption of jet fuel by U.S. commercial passenger flights was approximately 612,000 barrels per day (b/d), 43% of the estimated amount consumed on the same date one year earlier. This estimate is considerably higher than the estimate of jet fuel consumption compared with year-ago levels as of August 16, 2020, from Europe (36%), the rest of Africa (31%), the Middle East and North Africa (30%), the rest of Asia (28%), and in the rest of the Americas (24%). Relative jet fuel consumption in China (including its Special Administrative Regions Hong Kong and Macau) was, however, higher in August; China consumed 60% of the amount used in the previous year.

As discussed in greater detail in a previous EIA analysis, differences in the speed and degree of a region’s commercial jet fuel consumption recovery can be attributed to a couple of key factors.

First, each market’s or country’s exposure and response to COVID-19 has been different, particularly with respect to the timing of the disease’s arrival, the extent of government-required restrictions, and the country’s ability to effectively contain the disease. China’s relatively advanced state of recovery can be primarily attributed to its early exposure to COVID-19 and its relatively strict government controls.

Second, regional differences can also be attributed to a market’s reliance on domestic, rather than international, air travel. Because of the less severe restrictions on domestic travel (the U.S. Department of State has officially limited or advised against travel with several dozen countries), the shorter distances typically involved, and the larger share of domestic air travel that is non-discretionary, domestic air travel has, in most markets, been relatively less affected by COVID-19 mitigation efforts than international air travel.

U.S. commercial passenger flights and their fuel consumption
Source: U.S. Energy Information Administration, using raw flight data from Cirium

Within the United States, the decline in jet fuel consumption by commercial passenger flights was overwhelmingly driven by a decline in the number of flights. Although an average of 24,900 commercial passenger flights departed U.S. airports each day in January 2020, by July 2020, flight volume had declined to 13,700 per day—51% of the July 2019 level.

U.S. commercial passenger jet consumption by destination
Source: U.S. Energy Information Administration, using raw flight data from Cirium

The decrease in the overall demand for U.S. commercial passenger flights—and by extension, jet fuel—has not affected all flights equally, and domestic flights have been relatively more insulated from declines relative to international flights. Estimated U.S. jet fuel consumption by domestic commercial passenger flights fell by 47% between January 2020 and July 2020 compared with a decline of 70% for international flights during the same period. Consequently, the overall share of commercial passenger jet fuel consumed by domestic flights increased from an average of 56% in January 2020 to an average of 69% in July 2020.

EIA’s methodology for estimating the volume of jet fuel consumed by commercial passenger flights has some limitations. Importantly, the estimate does not measure total jet fuel consumption because it does not incorporate non-passenger cargo flights and general aviation, a category that consists of unscheduled flights such as those made by recreational pilots, helicopters, or travelers on private aircrafts. The estimate also excludes jet fuel consumed by the U.S. military, which, depending on the year and the branch of military service, can be a large amount.

To learn more about this topic, read the full article in the August 26, 2020, edition of This Week in Petroleum.

Principal contributor: Jesse Barnett