(John Kemp is a Reuters market analyst. The views expressed are his own)
LONDON (Reuters) – Global jet fuel consumption remains severely affected by the uneven recovery in aviation; cargo volumes have rebounded but cross-border passenger flying remains blocked by quarantine restrictions in many countries.
In the United States, commercial jet fuel production over the four weeks to Oct. 30 averaged just 0.7 million bpd compared with compared with 1.6 million bpd a year ago, a decline of 54%.
Globally, jet use has probably fallen by between 2 million and 3 million bpd compared with the last year, and the lack of aviation demand has become the single-largest loss of consumption in the oil market.
The deeper and longer slump in passenger aviation is the main reason petroleum consumption has recovered more slowly than OPEC+ anticipated earlier this year.
If passenger aviation reverts to more normal levels, it could boost global oil consumption by more than 2 million bpd, accelerating the rebalancing of the oil market.
But the timing and extent of any resumption in passenger aviation depends on the effectiveness and successful deployment of a coronavirus vaccine and other infection control measures.
Global oil consumption, and with it OPEC+ production policy, has therefore become dependent on the uncertain prospects and timing for a solution to the coronavirus crisis.
Before the coronavirus epidemic, worldwide jet fuel consumption was running at around 7 million barrels per day (bpd), according to the U.S. Energy Information Administration.
Of the total, roughly 5 million bpd was attributable to passenger services – with 2 million bpd on domestic routes and 3 million bpd on international ones.
Cargo consumed a further 1 million bpd on cargo-only services and as its share of fuel consumed by passenger services for freight carried in the hold.
The remainder was attributable to military aviation as well as privately operated passenger and cargo aircraft (“CO2 emissions from commercial aviation”, International Council on Clean Transportation).
Like the rest of global trade, air freight has rebounded fairly quickly since the pandemic and lockdowns earlier in the year (tmsnrt.rs/3erbHf4).
International trade volume by all modes, including ships, aircraft, trains and trucks, was down by 4% in August compared with the same month a year earlier, according to the Netherlands Bureau of Economic Policy Analysis.
Global air freight was down by 13% in August compared with the same month a year earlier, data from the International Civil Aviation Organisation (ICAO) show.
But Hong Kong’s international airport reported cargo volumes down by just 3% in September from the same month a year earlier.
Even London Heathrow, which has been hit hard by the recession in Britain, reported cargo down by a relatively modest 29% in September.
By contrast, passenger volumes were down 75% worldwide in August, according to the ICAO.
The recovery in passenger aviation has been uneven because quarantine restrictions have mostly been applied on travel between countries rather than within them.
Passenger flying has seen a much stronger rebound in large countries such as China and the United States which have a high share of domestic flights.
In China, which has a large internal market, passenger-kilometres flown were down by 29% in September from a year earlier, after falling 83% in February, according to the National Bureau of Statistics.
In the United States, airlines fuel consumption was down by around 46% in September, but that was a marked improvement on a deficit of 66% in May, data from the U.S. Bureau of Transportation Statistics show.
In smaller countries, however, where international routes are more important, passenger services continue to be heavily disrupted by quarantine restrictions.
London’s Heathrow reported passenger numbers were down 81% in September compared with the same month the prior year.
And Hong Kong, which has some of the toughest quarantine regulations, reported passenger numbers were down 98% in September.
In most cases, long-haul flights, which have the highest fuel consumption per passenger, have been hit harder than domestic and short-haul flights, where consumption tends to be lower.