It’s been a good year for oil around the world in most sectors, all but one: aviation, according to a new report from a UK-based data analytics organization.
Declining demand for kerosene from the aviation industry, a main ingredient in jet fuel, is all stopping a full recovery in petroleum products in the third quarter of 2021, GlobalData said.
“Demand for kerosene, which is primarily used for jet fuel, has hovered around two-thirds of pre-COVID-19 levels throughout this year,” GlobalData said Thursday. “Therefore, when included in the product flow analysis, the total demand for petroleum products is 3% lower than pre-COVID levels for the third quarter.”
Demand in one country, however, was crucial in 2021.
“China has been the engine of the recovery in global demand, driven by gasoline in the transportation sector and the continued growth of naphtha and LPG as the country expands its petrochemical sector,” said Will Scargill, analyst. in charge of energy at GlobalData, in a press release. “Other major economies still haven’t seen demand fully recover to pre-COVID-19 levels, but the strength of Chinese growth is closing the gap. “
Aviation demand continues to be shaped by COVID policies and restrictions, another analyst said.
“The continued restrictions will negatively impact demand for air travel,” said Nick Wyatt, head of travel and tourism research at GlobalData, in a statement. “The conundrum that airlines face is deciding whether to be able to stay online in the short term. “
Many airlines cannot easily absorb the flights which lead to financial losses due to low occupancy rates, he said.
“Therefore, there is a risk that they will err on the side of caution and tie up some of their fleets to reduce operating costs if they see demand slowing,” said Wyatt.
While aviation demand has yet to fully regain its pre-COVID levels, things aren’t really slow at the tarmac pumps.
“Business aviation is experiencing high demand for fuel in response to the pandemic as many rediscover the value of private aviation as a critical mode of transportation and a key business tool,” said Ryan Waguespack, vice president senior of the National Air Transportation Association. FLYING.
In November, business aviation flight activity increased 45.1% year-over-year in North America and 20.9% compared to activity reported in November 2019 , according to the latest Avfuel Industry Update.
Commercial traffic has also peaked in the past year, with a 131.1% increase in revenue passenger-kilometers (RPK) in the United States compared to October 2020. Despite this increase, commercial travel interiors, however, remained 10.5% below the corresponding reported levels. in October 2019, according to the Avfuel report.
As the aviation industry experiences growth in domestic and international travel as COVID restrictions relax, the Omicron variant is starting to have an effect, according to Muneeb Ahmed, director of commerce and logistics for Avfuel.
“In general, the increase in COVID-19 cases and hospitalizations is generally inversely correlated with the demand for air travel. However, it appears that each successive wave of COVID-19 so far has had less impact on the demand for air travel than the previous one, ”he said.
“Overall, while global jet fuel demand still lags behind 2019, it has recovered sharply and is currently outpacing current production,” Ahmed said. “This is not expected to change in the short term, so we will continue to see supply chain disruptions and new trade-offs opening up in the jet fuel world, causing each gallon of jet fuel to travel longer than it does.” never used. to, to arrive at its destination.