South Korean airlines have asked the government to redirect jet fuel exports back to the domestic market amid supply concerns, a move that could jeopardise almost half of Australia’s imports of the fuel. The request follows Chinese authorities flagging restrictions on fuel exports earlier this month.
Australia relies on foreign jet fuel for about 80% of the 10 billion litres consumed annually, according to the Australian Institute of Petroleum. South Korea supplies 18% of its jet fuel imports, while China provides a further third, meaning any curbs would significantly affect supply. Qantas has already joined several airlines in hiking prices to offset soaring costs.
An official at South Korea’s transport ministry said “some domestic carriers” had asked for export-bound jet fuel to be redirected to the local market. The ministry is attempting to relay the request to the trade ministry, which oversees fuel export policy, but an official there said no such request had been received and no restrictions were being considered.
The development coincides with a tightening fuel market across Asia-Pacific. Vietnam has reportedly notified carriers that jet fuel prices would double or triple at local airports, while Japan has warned of possible refuelling restrictions. The Philippines has declared a national energy emergency, with President Ferdinand Marcos Jr warning that grounding planes was “a distinct possibility”. Several South Korean budget carriers have cancelled flights to Vietnam and the US.
South Korea imports virtually all its crude oil, with around 70% transiting the Strait of Hormuz before its closure in early March. The government has capped petroleum prices and limited exports of gasoline, diesel and kerosene since 13 March, but jet fuel has so far been excluded. President Lee Jae Myung visited a strategic oil reserve facility on Thursday as part of the government’s response.
