NEW YORK, – Chicago has become the most expensive U.S. jet fuel market, with prices topping $5 per gallon, as the disruptions caused by the Iran war have combined with previously scheduled refinery maintenance to leave regional supply tight. Consumers worldwide have been hit hard by surging energy prices due to Iran’s blockade of the Strait of Hormuz, a chokepoint for Middle Eastern oil exports, forcing airlines to hike fares and cut capacity due to jet fuel shortages. The Chicago area has been hit by a double-whammy of ongoing refinery maintenance, which has pushed jet fuel prices to over $5 a gallon in the regional wholesale market, GasBuddy analyst Patrick De Haan said. Before the Iran war, Chicago spot jet fuel traded at about $2.47 a gallon, he said.
Chicago’s O’Hare International Airport is one of the world’s busiest.
Jet fuel prices in other U.S. spot markets have risen less dramatically. New York Harbor jet fuel stood at $4.85 a gallon on Tuesday, compared to $2.51 prior to the war, while U.S. Gulf Coast spot jet fuel has risen to $4.86 a gallon from $2.39 before the war, De Haan said.
Phillips 66’s 356,000-barrel-per-day Wood River refinery in Illinois took its crude oil unit and some other parts of the refinery offline at the end of February for a 45-day maintenance period, industry monitor IIR Energy told Reuters.
Marathon Petroleum’s 253,000-bpd Robinson refinery in Illinois also began planned maintenance in mid-March, with units expected to remain offline until mid-May, IIR said.
Midwest refinery outages averaged 398,000 bpd for the week ending April 3, highest among all U.S. refining regions, said Hillary Stevenson, vice president of energy intelligence at IIR.
Those refinery snags are affecting the supply and pricing of other refined products, with sharp increases registered in spot trading that will soon be passed on to consumers, GasBuddy’s De Haan said.
Cash differentials for Chicago spot market diesel jumped 25 cents a gallon to trade at a 5-cent discount to the ultra-low sulfur diesel futures benchmark on Tuesday, market participants told Reuters.
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