Jet Fuel No. 3 Market Intelligence Report (May 27, 2026)

I. Price Dynamics
1. Domestic Market
- Benchmark Quotations: As of May 26, 2026, the domestic benchmark quotation for premium-grade Jet Fuel No. 3 stood at RMB 8,000 per metric ton. Prices in Shandong Province have remained stable at this level for several consecutive days, while the wholesale price in Zhuhai, Guangdong Province, was RMB 7,800 per metric ton. Prices across other regions fluctuated between RMB 5,700 and RMB 7,800 per metric ton.
- Short-Term Volatility: The national average price declined to RMB 6,821 per metric ton on April 20 (–4.69% MoM), but subsequently stabilized amid a rebound in international oil prices triggered by escalating geopolitical tensions in the Middle East. On March 12, the ex-works price surged to RMB 8,500 per metric ton—a 18% increase year-on-year.
- Regional Disparities: Prices in Shandong Province remained stable; Zhuhai’s relatively lower logistics costs contributed to its slightly lower pricing. Regions highly dependent on imports (e.g., Australia) experienced price increases exceeding 20%.

2. International Market
- Singapore FOB Price: From May 8 to May 26, 2026, the Singapore FOB price for Jet Fuel No. 3 ranged between USD 150.93 and USD 188.65 per barrel. It peaked above USD 188.65 per barrel on April 30, reflecting persistent supply disruptions stemming from Middle Eastern conflicts.
- Cost Transmission: Sustained high international oil prices—with Brent crude repeatedly breaching USD 100 per barrel in March—have directly elevated domestic jet fuel procurement costs, increasing import costs by approximately 15–20%.

II. Key Driving Factors
1. Geopolitical Tensions and Supply Chain Risks
- Escalating Middle East Conflict: Heightened shipping risks in the Strait of Hormuz have prompted global refineries to prioritize domestic demand over exports, tightening international jet fuel supply.
- Shifts in Trade Flows: In March 2026, China’s jet fuel export volume declined 11.25% month-on-month, while imports totaled only 0.01 million tons—indicating a strategic domestic priority for supply security.

2. Recovery in Air Transport Demand
- Domestic Market: In 2025, civil aviation transport turnover reached 1,640.8 billion ton-kilometers (+10.5% YoY), and passenger traffic amounted to 770 million person-trips (+5.5% YoY). These figures are projected to rise further in 2026 to 1,750 billion ton-kilometers and 810 million person-trips, respectively.
- International Market: In 2025, international air passenger traffic grew 7.1% YoY, while cargo demand rose 3.4% (with international operations up 4.2%). General aviation flight hours increased from 984,000 hours in 2020 to 1,218,000 hours in 2025 (+23.8%), emerging as a new engine of demand growth.

3. Cost-Policy Linkages
- Airlines’ Cost Pressure: Aviation fuel accounts for 30–40% of airlines’ total operating costs. Surging international oil prices have compelled carriers to raise fuel surcharges—for instance, domestic flights under 800 km saw surcharges climb from RMB 10 to RMB 60 per segment.
- Policy Support: National policies encourage general aviation development, explicitly stipulating that jet fuel sales prices for general aviation activities using transport airports must not exceed those applicable to scheduled commercial aviation—thereby lowering operational costs.

4. Sustainable Aviation Fuel (SAF) Transition
- Technological Breakthroughs: The bio-jet fuel industrial chain is maturing progressively, with production costs expected to decline steadily. Supported by policy incentives, SAF’s share will gradually expand, positioning it as the core pathway toward industry decarbonization.

III. Competitive Landscape and Supply Players
1. Market Concentration
- The “Big Three” state-owned oil companies (Sinopec, PetroChina, and CNOOC) continue to dominate over 90% of China’s jet fuel market. Meanwhile, private refining enterprises—including Hengli Petrochemical, Zhejiang Petrochemical, and Shenghong Petrochemical—are rapidly ascending, leveraging large-scale integrated refining & petrochemical projects. In 2024, local refiners’ jet fuel capacity exceeded 8 million tons/year, accounting for 18% of national capacity—an increase of 12 percentage points since 2018.

2. Technological Upgrades and Capacity Expansion
- Improved Jet Fuel Yield: Newly commissioned facilities (e.g., Hengli Petrochemical, Zhejiang Petrochemical) achieve jet fuel yields generally exceeding 14%, whereas expansion projects such as Jiangsu Shenghong and Zhenhai Refining & Chemical report yields around 10%.
- Capacity Ramp-Up: In 2025, China’s domestic jet fuel output surpassed 57 million tons, rising 5.76% YoY—sufficient to meet domestic demand while enabling expanded exports.

IV. Short- and Medium-Term Outlook
1. Short Term (1–3 Months)
- Elevated Price Levels: Ongoing Middle East conflict and supply-chain tightness are likely to sustain upward pressure on international oil prices, resulting in domestic jet fuel prices remaining volatile within the range of RMB 7,500–8,500 per metric ton.
- Widening Regional Disparities: Regions heavily reliant on imports may experience price increases exceeding 20%, while areas with ample domestic supply will see comparatively muted fluctuations.

2. Medium Term (6–12 Months)
- Demand-Driven Growth: With continued global economic recovery and sustained expansion of the air transport sector, jet fuel demand growth is expected to reach 6–8% annually, potentially pushing prices above RMB 9,000 per metric ton.
- Accelerated Structural Transformation: Technological breakthroughs and economies of scale in SAF production—combined with supportive policies and growing market demand—will drive an incremental rise in bio-jet fuel adoption, advancing industry-wide green transformation.

V. Risks and Opportunities
1. Risk Factors
- Geopolitical Conflict: Prolonged instability in the Middle East could trigger further spikes in international oil prices, intensifying cost pressures.
- Supply Chain Disruptions: Shipping risks in the Strait of Hormuz may precipitate regional jet fuel shortages.
- Underwhelming Demand: Slower-than-expected global economic recovery or intensified high-speed rail competition could constrain jet fuel demand growth.

2. Opportunity Areas
- SAF Industrialization: Technological progress and falling production costs in bio-jet fuel will open a new growth frontier.
- Rise of Private Refiners: Local refineries are enhancing their market share through technological upgrades and capacity expansions.
- General Aviation Development: Low-altitude airspace opening policies are fostering growth in general aviation flight hours, thereby stimulating jet fuel demand.