USGC $100 Jet Fuel Crack Threatens Summer Fuel Balance


   
Miguel E. Andujar
DTN Refined Fuels Market Reporter

   DAVENPORT, FL (DTN) -- U.S. Gulf Coast jet fuel crack spreads have surged 
above $100 bbl for the first time on record, signaling a tectonic shift in 
refinery economics that threatens to tighten the broader U.S. fuel balance.

   The unprecedented triple-digit pricing creates a massive margin incentive 
that is increasingly drawing production away from the gasoline pool just as the 
summer driving season approaches.

   The current market disparity highlights a growing tension across the refined 
products barrel, driven by tightening global supply flows and ongoing Middle 
East disruptions. While gasoline demand has yet to fully align with seasonal 
norms, the overwhelming premium for middle distillates is forcing refiners to 
prioritize jet and diesel yields over motor fuel production.

   Global supply risks linked to tensions involving the Strait of Hormuz -- a 
transit point for roughly 20% of global oil flows -- have already begun to 
impact middle distillate markets, particularly jet fuel, which relies heavily 
on medium sour crude streams originating from the region. Disruptions and 
rerouting of these flows have tightened availability of jet fuel globally, with 
the effects increasingly reflected in U.S. Gulf Coast pricing.

   U.S. jet fuel demand, as measured by product supplied from the U.S. Energy 
Information Administration (EIA), rose to 1.785 million bpd in the most recent 
week, up 14.6% week-on-week and 9.8% year-on-year.

   On the supply side, U.S. exports are reinforcing the pull on distillate 
barrels. Jet fuel exports increased 8.3% week-on-week to 380,000 bpd, while 
distillate exports climbed 19.2% on the week to 1.406 million bpd. Meanwhile, 
gasoline exports declined 4.7% to 829,000 bpd, indicating more gasoline is 
being retained domestically even as distillates are drawn into global markets.

   The most significant change was seen in Gulf Coast jet fuel crack spreads as 
they climbed above $100 bbl in March, according to DTN Energy data. Ultra-low 
sulfur (ULSD) crack spreads have traded in the mid-$80s bbl range in recent 
sessions.

   Meanwhile, Gulf Coast RBOB gasoline crack spreads have lagged near $25 bbl 
to $30 bbl, underscoring a margin differential of roughly $70 bbl versus 
gasoline and $15 to $20 bbl against ULSD.

   Not Just USGC Problem

   That pricing is not isolated to the Gulf Coast, with Chicago jet fuel now at 
$5.36 gallon, up $2.88 from February 27, New York at $4.87 gallon, up $2.36, 
and Los Angeles at $4.61 gallon, up $1.99, reflecting a broad repricing across 
major U.S. hubs. The scale of the move, approaching $2 to nearly $3 gallon in 
just over a month, underscores how quickly tightness in middle distillates has 
translated into outright price pressure across regions.

   Gasoline margins, while improving seasonally, have not kept pace. With 
gasoline demand at 8.686 million bpd, approaching seasonal norms, the weaker 
relative margin structure suggests refiners may not increase gasoline output to 
the same extent as in prior years. Distillate cracks are running roughly $30 to 
$35 bbl higher than comparable levels during the same period last year, 
reinforcing the shift in refinery economics.

   The implication is not an immediate gasoline shortage, but a tightening 
balance across the barrel. As jet fuel continues to draw strength from global 
supply disruptions and sustained demand, and as distillate exports remain above 
1.1 million bpd, the economics favor distillate production over gasoline.

   If these trends persist -- including jet crack spreads at above $100 bbl, 
ULSD cracks in the mid-$80s and continued strong backwardation in distillate 
futures -- the strength currently in jet fuel could bleed into the distillate 
pool and begin to constrain gasoline supply just as the U.S. enters peak 
driving season.

    




(c) Copyright 2026 DTN, LLC. All rights reserved.