Trump's oil sales stance is countered by analysts: The United States doesn't have that much aviation fuel!

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Source: Cailian Press

Cailian Press, April 2 (Editor: Ma Lan) — U.S. President Trump stated on social platform Truth Social on Tuesday that countries unable to access aviation fuel due to the Strait of Hormuz blockage can purchase from the U.S. or control the Strait of Hormuz themselves to extract oil.

This remark has left markets and professionals feeling both absurd and confusing, seemingly indicating that the U.S. is being dragged into a quagmire in the Iran conflict. Moreover, Trump’s claim that the U.S. has ample energy supplies to provide aviation fuel to other countries is also unfounded, as analysts point out that the U.S. does not have the capacity to fill the global fuel gap.

Data from ship tracking service provider Kpler shows that approximately 500k barrels of aviation fuel are exported daily from the Strait of Hormuz, mainly to Europe, with some exports to Asia and Africa. The U.S. Energy Information Administration (EIA) data indicates that last year, the U.S. exported an average of 219k barrels of aviation fuel per day.

The latest report from the U.S. Energy Information Administration reveals that last week, U.S. refineries and fuel blending plants produced 1.97 million barrels per day of jet fuel, but this output was only slightly above the demand of 1.79 million barrels per day. This means that the actual available aviation fuel for export in the U.S. is quite limited.

Increased exports put pressure on domestic prices

Kpler analyst Matt Smith said that even if the U.S. has sufficient aviation fuel supplies, it is unlikely to replace the supply from the Strait of Hormuz because most of the U.S. aviation fuel is produced along the Gulf Coast, while major demand centers on the East and West Coasts have traditionally relied on imports to meet their needs. Currently, the U.S. West Coast has shifted to sourcing more fuel from the Gulf Coast, intensifying domestic demand competition.

Due to the demand gap for aviation fuel in markets like Asia and Europe, U.S. fuel suppliers have increased exports driven by profit motives, which in turn raises domestic prices.

Tom Kloza, Chief Energy Advisor at Gulf Oil, said that since the outbreak of the Iran war, U.S. aviation fuel prices have surged, though the increase has been less than in other markets directly affected by the Strait of Hormuz blockade, thus encouraging more U.S. exports.

He added that at least four to five batches of aviation fuel and diesel are being shipped from the New York port area to Europe, products that are usually transported from Europe to the U.S. East Coast.

According to GasBuddy, wholesale prices for aviation fuel in most parts of the U.S. currently range between $4 and $5 per gallon. GasBuddy Petroleum Analyst Patrick De Haan noted that, by comparison, prices along the Gulf Coast are typically between $2.50 and $3 per gallon.

De Haan warned that with increasing export demand, U.S. consumers will face rising prices, posing a new challenge for the Trump administration.