Shell Ramps European Refineries to Full Capacity for Jet Fuel
Shell Plc said Europe’s oil refineries are operating at full capacity to produce jet fuel as airlines warn of an impending supply crunch driven by the Iran war. Frans Everts, head of Shell’s Dutch business, confirmed that every refinery is on 'max jet mode' to meet surging aviation demand.
1. Refineries at Maximum Jet Fuel Output
Shell’s European refineries have shifted operations to prioritize jet fuel production, running at full load across all units. This strategic focus aims to alleviate tightening supplies as airlines signal growing concerns over fuel availability.
2. Middle East Conflict Drives Aviation Fuel Demand
The Iran war has elevated geopolitical risks and disrupted crude supply chains, prompting airlines to secure additional jet fuel. Higher regional tensions have also spurred trading desks to favor middle distillates, further straining conventional output metrics.
3. Operational Changes and 'Max Jet Mode'
Under 'max jet mode', refineries reconfigure processing units to maximize kerosene yields, adjusting crude slates and throughput rates. This shift often reduces output of other refined products, requiring careful balancing of diesel and gasoline production.
4. Potential Impact on Shell’s Margins and Market
Increased jet fuel yields could bolster refining margins if crack spreads remain elevated, supporting Shell’s short-term profitability. However, sustained focus on aviation distillates may pressure other product lines and necessitate cargo arbitrage to optimize returns.