April Recap - European Jet Fuel

Jet CIF NWE Cargoes Prompt averaged $1,552.95/mt, essentially flat MoM but +130% YoY, with the headline obscuring three distinct phases: a record $1,838.25/mt on Apr 2 (US escalation rhetoric),a -$316/mt collapse on Apr 8 (ceasefire announcement) and another -$291/mt move on Apr 17 (Iran’s brief Hormuz reopening), then a recovery into month-end as the US naval blockade and Iranian reversal restored the structural shortfall. The mechanism remains Strait of Hormuz closure removing approximately 247kbd ofNWE jet imports (Kpler), with ARA jet stocks falling to the lowest level since April 2020 (Insights Global) as physical evidence; the cargo-barge premium widened to +$53/mt vs +$3.50/mt year-ago, hitting a new monthly high of +$87/mton Apr 30, the cleanest signal that imported barrels are commanding a structural scarcity tax over domestic supply.

Cross-regionally, the NWE-Singapore arb monthly average flipped to -$2.47/bbl as ~231 kbd of reverse arbitrage pulled cargoes east (Kpler), while NWE-USGC premium held at+$25.52/bbl with US exports hitting a record 442 kbd. The ICE LSGO curve printed front collapse plus back repricing, with M1 falling $58/mt month-end-to-month-end while M3-M24 all gained, signaling prompt relief alongside structurally tighter distillate availability through 2027. The forward question is binary: sustained Hormuz reopening triggers sharp front-end give-back; sustained closure forces the back curve higher and pushes airline capacity cuts into peak summer demand.

Market Activity

Headline reads bid-aggressive on derivatives (Jet vs LSGO outright diff bid/offer 4.31:1), offer-side dominated on physical cargo (Jet A1 MOC 0.80:1) as producers offloaded replacement barrels at peak prices; market-maker withdrawal mid-month confirmed the volatility-driven liquidity regime change.
Cargo physical Jet A1 DEFSTAN MOC NWE Cargoes flipped from buyer-aggressive to seller-aggressive: 20 bids / 25 offers / 7trades in April vs 49 / 21 / 5 in March; bid/offer ratio went from 2.33:1 to0.80:1 even as the cargo-barge premium peaked at +$79.25/mt mid-month.
- Producer/integrated-major selling led the offers (TOTSA, BP, Unipec); the flip is consistent with replacement Atlantic Basin and reverse-arb cargoes physically arriving and clearing once secured, with sellers no longer needing to bid up and buyers becoming more selective at record flat prices.
- Consumer-style buying held with Shell Trading Rotterdam, BP, and TOTSA on the bid; the trade count rose to 7 from 5 MoM despite fewer bids, indicating offers cleared into genuine demand and the market transitioned from competitive-bid to offer-clearing, a late-cycle signaling any physical squeeze.
Cargo derivatives Jet vs LSGO 1st Line outright diff turned the most bid-aggressive venue: 69 bids / 16 offers / 34 trades vs92 / 48 / 10 in March; bid/offer jumped from 1.92:1 to 4.31:1, trades up 3.4xMoM.
- Bid-aggression on the diff alongside front collapse on flat price is the centrepiece of the month: consumers locked in jet-vs-gasoil exposure even as flat prices eased, signalling mandate/coverage hedging for summer aviation rather than directional speculation; TOTSA, Glencore, and Unipec dominated bids while Gunvor and BP rotated to selling, intermediary positioning rather than directional flow.
- The 34 April trades is the highest of the entire jet paper suite, confirming the diff is where the month’s directional view was being expressed.
Cargo derivatives Jet vs LSGO 1st Line spread held a steady ~2.3:1 bid/offer (105 / 46 / 23 vs 152 / 76 / 6) but trades surged 3.8x MoM as price discovery shifted to the spread once flat prices became too volatile to trade outright; stable ratio plus surging trades signals a market clearing rather than seizing up.
Market-making regime change: Xconnect Market Maker LLP dominated March across the Jet vs LSGO spread, outright diff, and Balmo as a top-three buyer and top seller on all three venues, then disappeared entirely from April.
- The withdrawal aligns with Argus’s late-April observation of jet paper bid-offer spreads widening to ~$10/t vs the typical$0.25-1/t range; market-makers step back when realised volatility spikes because two-way quotes get picked off, and the Apr 2 (+$223), Apr 8 (-$316), and Apr 17 (-$291) single-session moves were exactly the conditions that force a withdrawal.
- The gap was filled by trading houses (Gunvor, Vitol, DV Trading, Aramco, Derivatives Trading Atlantic) and consumer/producer flow rather than dedicated market-makers; physical price discovery held but spread economics widened structurally and will persist until volatility normalises or a new market-maker steps in.
- Implication for execution: lifting large size in jet paper through May requires expecting 5-10x normal slippage and splitting orders across the spread and outright diff rather than relying on a single venue.
Barge complex thinned as the cargo-barge premium widened: Jet Barge vs CIF Cargoes Mean collapsed to 7 / 4 / 1 vs March’s 36 /28 / 6; Jet Barge vs ICE LSGO M1 traded 0 / 19 / 8 (offer-only, all sells from BP and TOTSA), consistent with refiners and majors selling forward barge production directly rather than chasing the cargo benchmark, the producer-flow read on why FOB barge held below CIF cargo by an unusually wide margin all month.

Price Action

Jet CIF NWE Cargoes Prompt averaged $1,552.95/mt, +130% YoY but flat MoM as the Mar 31 backwardation peak unwound through April.
Jet CIF NWE Cargoes Prompt opened at $1,615.25/mt (Apr 1), printed an all-time high of$1,838.25/mt (Apr 2) on US escalation rhetoric, troughed at $1,321.50/mt (Apr17) on Iran’s brief statement that Hormuz was “completely open” during a Lebanon truce, and closed at $1,528.75/mt (Apr 30).
Monthly avg $1,552.95/mt vs March’s$1,551.93/mt (+0.1% MoM) and April 2025’s $676.60/mt (+130% YoY); the flat MoM masks the regime shift from a March that ended at peak backwardation to an April that traded the unwind.
Two largest single-day moves were both downside: -$316.25/mt on Apr 8 (ceasefire announcement, Islamabad talks scheduled) and -$291.00/mt on Apr 17 (Iran Hormuz statement); both reversed within five sessions as Hormuz remained largely closed and the US imposed a naval blockade on Iranian ports Apr 13.
Intra-month range $516.75/mt vs March’s$786.75/mt and April 2025’s $124.75/mt; range narrowed MoM but is still ~4x year-ago, the volatility regime change is structural, not a March outlier

Cross-Market Dynamics

Cargo-barge premium widened to +$53.19/mt (15xApril 2025), hitting a monthly high of +$87.25/mt on Apr 30; Regrade compressed-13% MoM as ULSD repriced harder than jet.
Cargo-barge spread (Jet CIF NWE Cargoes minus Jet FOB NWE Barges) averaged +$53.19/mt vs+$32.60/mt March and +$3.50/mt April 2025; widened progressively through the month to a new monthly high of +$87.25/mt on Apr 30, reversing the mid-month easing.
The premium is the import-scarcity tax: Hormuz closure removed ~247kbd of historical Mid-East jet flows to NWE (Kpler),forcing cargo buyers to pay up for replacement Atlantic Basin and reverse-arb barrels while domestic ARA/Flushing/Ghent refining clears at a smaller premium; ARA jet stocks fell to ~600kt in the week to Apr 15, lowest since April 2020 (Insights Global), down 7.6% WoW for a second consecutive week.
Regrade (Jet CIF NWE Cargoes vs ULSD CIF NWE Cargoes BBL) Prompt averaged +$22.24/bbl in April, closing at +$12.62/bbl on Apr 30 (compression below monthly average as ULSD held while jet eased) vs+$26.06/bbl March and +$0.99/bbl April 2025; range +$8.45/bbl (Apr 9 trough) to+$35.82/bbl (Apr 16 peak).
ULSD Prompt rose +2.6% MoM ($1,300.07 vs$1,266.99/mt) while jet was flat, compressing the spread; mechanism is German diesel tax cuts (Apr 13), Slovenian rationing, and broader EU diesel import shortfall as ARA gasoil stocks fell 8% in April vs -1% March (Insights Global).
Jet vs ICE LSGO Futures diff Prompt averaged+$304.76/mt vs +$358.73/mt March and +$55.39/mt April 2025; the spread compressed but remains 5.6x year-ago.
Jet crack vs Brent Dated (Jet CIF NWE Cargoes/ 7.89 minus Brent Dated Prompt) averaged +$76.40/bbl in April vs +$93.01/bbl March and +$18.01/bbl April 2025; crack compression reflects Brent rising +16%MoM ($120.42/bbl avg) faster than jet flat, with jet remaining 4.3x year-ago profitable but the marginal pricing power passing back to crude.

Cross-Regional Dynamics

NWE-Singapore arb monthly average flipped to-$2.47/bbl as reverse arbitrage pulled cargoes east; NWE-USGC premium held at+$25.52/bbl, structurally embedded.
NWE CIF Cargoes Prompt at $196.83/bbl (avg) traded below Singapore FOB Cargoes at $199.29/bbl, a -$2.47/bbl discount vs +$4.98/bbl March and +$4.91/bbl April 2025; the directional sign flipped for the first time.
Mechanism: Asia-Pacific reverse arbitrage hit a record ~231 kbd of jet and gasoil arriving from west of Suez in April vs 7-15kbd historically (Kpler), as Asian buyers paid up to backfill the Mid-East Gulf gap; daily NWE-Singapore deepest discount was -$42.54/bbl on Apr 17, but reverted to +$19.18/bbl by Apr 29 and closed +$4.18/bbl on Apr 30 as Singapore eased on reverse-arb fatigue.
NWE-USGC Waterborne (BBL-converted) averaged+$25.52/bbl vs +$22.56/bbl March and -$0.18/bbl April 2025; structurally elevated as US has emerged as the swing supplier with exports at a record 442kbd in early April, ~6x normal (SocGen), but spec friction throttles throughput as Jet A vs Jet A1 spread at USGC reached +$2.10/bbl since Mar 2 (Argus).

Curve Structure

Front collapse plus back repricing; ICE LSGOM1-M3 narrowed from +$266.50 to +$152.25/mt while M3-M24 all gained $26-74/mt MoM (curve snapshot Apr 29; Apr 30 LSGO settlement not yet integrated).
Pattern is front collapse plus back repricing:M1 fell $58/mt month-end-to-month-end while M3 +$56.25, M6 +$73.50, M12+$35.25, M24 +$26.75; the prompt eased on intra-month ceasefire optimism while every deferred tenor priced higher.
- Apr 2025 M1-M3 was +$10.75/mt; the curve is still 14x more backwardated than the year-ago baseline despite April’s flattening.
The back-end gain is the structural read: IEA, IATA, and Kpler have signaled jet supply recovery would take months even ifHormuz reopens, due to refining capacity damage and logistics; the curve is repricing distillate availability into 2026-2027 independent of front-month politics.
- Jet-specific prompt structure (Jet Fuel NWE CIF Cargoes Implied Half Daily Structure) averaged -$3.13/mt in April vs -$5.67/mt March and -$0.33/mt April 2025; backwardation eased 45% MoM but remains ~10x year-ago, aligned directionally with LSGO curve flattening.
Implication: with the front collapsing while the back reprices, carry trade economics improve but storage and freight remain expensive; long deferred vs short prompt is no longer the layup it was in March.

Price Volatility

CV compressed to 7.23% from March’s 12.39%, but remains 1.62x April 2025 (4.47%).
CV compressed 42% MoM as the post-Apr 8 ceasefire backdrop reduced the daily violence of price moves, even as flat prices remained near record highs; intra-month range $516.75/mt vs March’s $786.75/mt.
April 2025 CV was 4.47%; April 2026 is still 1.62x year-ago, so hedging models calibrated to a normal year would systematically under-cover.
The compression is event-conditional: any new Hormuz development re-expands the daily range immediately, as the Apr 2 (+$223), Apr 8 (-$316), and Apr 17 (-$291) prints proved.

Something to Watch

Hormuz status as the binary catalyst.
- Observation:Strait remained largely closed through April despite the Apr 8 ceasefire; Iran reversed Apr 18; US blockade of Iranian ports active since Apr 13; mine-clearance estimated at 6 months even after political resolution (US Navy).
- Why it matters: a confirmed sustained reopening triggers ~$300/mt downside on jet flat, deep front-end re-rating, and likely back-curve give-back; sustained closure past mid-May forces back curve to reprice further as the disruption shifts from acute to structural.
- What to monitor: daily Lloyd’s List Hormuz transit count; insurance war-risk premium (currently 1-5% of hull value vs<0.25% pre-war); next Vortexa/Kpler arrival data for NWE.
Cargo-barge spread as the regional scarcity gauge.
- Observation: cargo-barge averaged +$53.19/mt in April, hit a new monthly high of +$87.25/mton Apr 30, ARA jet stocks at 6-year low (Insights Global).
- Why it matters: a sustained narrowing back toward March’s +$33/mt would signal seaborne supply restored; sustained widening above the +$87/mt Apr 30 high would signal the import shortage is intensifying despite reverse-arb flows.
- What to monitor: weekly Insights Global ARA jet stocks (Thursdays); UK jet cargo arrivals (UK pulling from ARA tightens NWE further); weekly NWE jet imports.
Airline capacity cuts as the demand-destruction signal.
- Observation: Lufthansa announced 20,000 flight cancellations through autumn (~40,000 t fuel saved), KLM cutting 160 flights, SAS 1,000+ flights; Ryanair CEO O’Leary warned of European airline failures if jet stays >$150/bbl into Q3.
- Why it matters: industry-wide capacity cuts of5-10% would meaningfully reduce European jet demand, easing the import shortfall and compressing the cargo-barge premium; further cuts at peak summer demand are the most likely route to physical balance without Hormuz reopening.
- What to monitor: airline H1 results and capacity guidance through May earnings; IATA Jet Fuel Price Monitor weekly read (week-to-Apr-24 at $179/bbl); seat-capacity data for July-September schedules.