‘nia, 2:41 PME Air Travel Resurgence Lifts Global Jet Fuel Demand | Energy Ineligence Energy Intelligence GLOBAL DEMAND Air Travel Resurgence Lifts Global Jet Fuel Demand Copyright © 2022 Energy latelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited. Fri, Jul 8, 2022 Authors Editor na Haus, New York Cristina Haus Julien Mathoaniere, Landon Airlines are emerging from the pandemic only to face more turbulence. Headwinds from high fuel prices, labor shortages and a fragile economic situation are complicating the recovery, which is now well under way. Pent-up travel demand has sparked a boom in air travel this summer, transforming jet fuel from the laggard to the fastest-growing refined product. Jet fuel demand is expected to post a 15% gain this year to 6.5 million barrels per day, according to latest Energy Intelligence assessments. Asimilar rise in 2023 should bring it close to peak 2019 levels of 7.9 million b/d. This year’s rebound would put jet fuel demand in the Americas just 7% below 2019 levels, with Europe showing a 15% htpsswww-onergyintel.com/00000181-40-4598-a182-7faa1740000, asiz22, 241 PM ‘AirTravel Resurgence Lis Global Jet Fue Demand | Energy lttigence shortfall. Asia is the furthest behind with regional demand expected to reach 75% of 2019 rates this year, our figures show. Allof this year’s gain comes from OECD countries, where fuel usage shows a 36% rebound. US jet fuel markets have restored 90% of their pre-Covid-19 size as demand approaches 1.6 million b/d. Planned capacity expansion in the US and Europe that would have lifted demand even further have been reined in by labor shortages across all segments of the business. European jet demand is projected to jump by 70% from 2021 to reach 1.2 million b/d this year after dropping to less than 200,000 b/d at the start of the pandemic. Regional air traffic was back to 86% of pre-pandemic levels in late June, according to network manager Eurocontrol, but has fallen to 84% with the cancellation of flights at UK airports, Amsterdam's Schiphol and Charles de Gaulle in Paris, where strike action disrupted operations. The number of flights is still creeping up for the summer season, while rerouting to avoid Russian airspace has added to fuel use. China's Setback Frayed connectivity is still apparent in Asia, where governments have been slower to remove travel restrictions. The setback in China dominates the regional picture, which is the only area to see demand contract this year and accounts for the 3% drop in non-OECD consumption. Lockdowns in Shanghai and Beijing imposed in April under Beijing's zero-Covid-19 policy slashed China's fuel usage ‘to 200,000 b/d in May from average levels of 800,000 b/d last year, when domestic air traffic had normalized. Airports in Dubai and Qatar are regaining their role as major gateways for travel from Europe to Asia, lifting Middle Eastern fuel usage back to 2019 levels by next year. A rebound in Brazil is spurring all of the 20% rise in Latin America. Labor shortages in the US and Europe have caused widespread flight cancellations and prompted capacity cutbacks. After two years of massive downsizing, airlines and airports are not equipped to handle the travel surge, which peaked in the US during the July Fourth holiday period. More than 1,400 flights were canceled and 14,000 delayed due to staffing issues and bad weather. An acute pilot shortage forced American Airlines to ground a regional carrier earlier this year that serviced smaller cities. In Europe, British Airways has scrapped 30,000 flights between April and October to minimize cancellations. Eurocontrol’s Director-General Eamonn Brennan said a lack of financial assistance during the pandemic meant that airports have taken much longer to recover. He admitted that, "July and August are going to be difficult” Underlying metrics show the recovery gathering strength. By the end of May global passenger traffic flows had reached 70% of pre-pandemic levels as international travel gained more traction, according to latest International Air Transport Association (IATA) data. International travel accounts for 40% of the market and had jumped 325% versus May 2021. Cargo markets have weakened this year after achieving a full recovery in 2021. While supply constraints in China have eased with the lifting of Omicron travel restrictions, IATA said that cargo flows have been impacted by weaker export orders and the war in Ukraine, since airline capacity that serves the European market is off line in both Russia and Ukraine, hitpsswww-onergyintel.com/00000181-4310-4598-a182-7faa1740000‘nia, 2:41 PME Air Travel Resurgence Lifts Global Jet Fuel Demand | Energy Ineligence GLOBAL JET FUEL DEMAND IN 2019-23 BY REGION WITH COUNTRY DETAIL (1000 bya) 2019 2020.«= 2021 2022e = 2028e Chag.'22vs.'24 ‘Americas 2006 1,217 1,544 1,853 1,962 20.0% United States 1738 1075 1,368 1,625 1,720 18.8% Canada 141, 64 7 108 121 39.4% Mexico 84 39 62 85 86 35.8% OECD Europe 1451 625 730 1,238 1,474 69.5% Europe Big 5 ott 381 438, at 1,025 103.6% Germany 220 101 132 190 230 44.0% France 171. 82 88 150 175 70.9% United Kingdom 267 107 103 210 275 103.5% Italy 104 38 42 75 110 77.9% Spain 149, 52 73 130 150 79.3% £U-15 1,217 527 615 1,176 1,353 91.2% Other OECD Europe 234 98 115 199 229 72.7% Asia Oceania 590 317 319 406 564 39.7% Japan 223 115 121 193 217 60.1% South Korea 147 104 109 131 147 20.0% Australia 162 70 64 86 160 35.3% Total OECD 4047 2159-2594 «3,537 4,000 36.4% Asia 2,220 1,600 1,905 1723 2,063 95% China 876 660 808 600 850 25.8% India 331 226 266 266 367 0.1% Indonesia 101 90 80 60 86 -25.0% Taiwan 14 14 14 15 16 3.0% Thailand 212 136 163 167 180 3.0% Middle East 670 522 505 519 686 28% Saudi Arabia 167 115 66 7 169 15% Iran 86 73 75 7 102 3.0% UAE 208 127 162 167 200 3.0% Latin America 275 166 216 262 263 20.9% htpsswww-onergyintel.com/00000181-40-4598-a182-7faa1740000, 34‘nia, 2:41 PME Air Travel Resurgence Lifts Global Jet Fuel Demand | Energy Ineligence Brazil 120 61 67 110 115 646% Venezuela 6 5 6 6 6 15% Argentina 58 3 53 54 54 15% FSU 3438245266282 2a 64% Africa 31424196202 220 30% Eeypt 29 7 18 19 2 50% South Africa ~ 43 36 2 65 182% Non-OECD Europe 25 v 2 2 2 8.0% Total Non-OECD 3852 2774 3109 «30103495 “32% Total World 7099 49335702 6547—7495 148% (e) estimates for 2022 and 2023 Source: Energy Intelligence Topics: Jet Fuel, Oil Demand htpsswww-onergyintel.com/00000181-40-4598-a182-7faa1740000,