Jet Fuel Prices in Chicago Exceed $5 per Gallon Amid Refinery Maintenance and Wartime Supply Chain Disruptions

Surging Energy Prices Hit Chicago Air Travel

New York, - The ongoing disruptions caused by the Iran war have combined with previously scheduled refinery maintenance to leave regional supply tight, making Chicago the most expensive U.S. jet fuel market. Prices in the Chicago area have skyrocketed to over $5 per gallon in the regional wholesale market, according to GasBuddy analyst Patrick De Haan.

The Chicago area has been hit by a double-whammy of ongoing refinery maintenance, which has pushed jet fuel prices to over $5 a gallon in the regional wholesale market. Before the Iran war, Chicago spot jet fuel traded at about $2.47 a gallon, De Haan said. This significant price hike is a result of the ongoing Iran war, which has caused a blockade of the Strait of Hormuz, a chokepoint for Middle Eastern oil exports.

The impact of the Iran war has been felt worldwide, with consumers hit hard by surging energy prices. Airlines have been forced to hike fares and cut capacity due to jet fuel shortages. The Chicago area has been particularly affected, with O'Hare International Airport, one of the world's busiest airports, feeling the pinch.

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A comparison of jet fuel prices in other U.S. spot markets shows that Chicago is not alone in its price hike. New York Harbor jet fuel stood at $4.85 a gallon on Tuesday, compared to $2.51 prior to the war, while U.S. Gulf Coast spot jet fuel has risen to $4.86 a gallon from $2.39 before the war, De Haan said.

The refinery outages in the Midwest have averaged 398,000 bpd for the week ending April 3, the highest among all U.S. refining regions, said Hillary Stevenson, vice president of energy intelligence at IIR. This has affected the supply and pricing of other refined products, with sharp increases registered in spot trading that will soon be passed on to consumers, De Haan said.

The refinery maintenance has also had a significant impact on the prices of other refined products. Cash differentials for Chicago spot market diesel jumped 25 cents a gallon to trade at a 5-cent discount to the ultra-low sulfur diesel futures benchmark on Tuesday, market participants told Reuters.

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