2026 Preview: Refinery Issues, Demand and SAF to Guide US Jet Fuel Market in the New Year

U.S. spot jet fuel supply and prices will remain vulnerable to refinery issues in the new year, while producers face slower demand growth and increased competition from sustainable aviation fuel.

Spot jet fuel values mostly tracked typical seasonal demand trends in 2025, with prices firming on increased holiday and summer travel season demand. And while that pricing pattern is likely to continue in 2026, potential supply disruptions could lead to sharp price jumps.

Spot jet fuel prices in Los Angeles, San Francisco and Chicago spiked in 2025 on a series of refinery issues, particularly in Chicago, where jet fuel in late October was pricing at more than $3.25/gal, far above the $2.25 to $2.50/gal range reported in other East of the Rockies markets. The jump in prices was tied to operating issues at BP’s 440,000 b/d Whiting, Ind., refinery.

Refinery issues on the West Coast also contributed to higher jet fuel prices. An early October fire at Chevron’s 290,000 b/d El Segundo, Calif., plant damaged a jet fuel production unit and pushed jet fuel prices into the mid-$2.70s by late October. Prices backed off after the refinery resumed production.
More price spikes may be in store in 2026 if refinery issues come close to what was seen in 2025, particularly in the U.S. West and East coasts and in the Midcontinent.

U.S. jet fuel production averaged 1.815 million b/d over the first 11 months of 2025, according to Energy Information Administration data. Over the same period Midwest (PADD 2) output averaged about 320,000 b/d, while West Coast (PADD 5) average production was 427,000 b/d. On the East Coast (PADD 1), jet fuel output averaged just 78,000 b/d. Output in each of those regions trailed the average output of 958,000 b/d in the refinery-rich Gulf Coast (PADD 3). Given the lower number of refineries operating in PADD 1, 2 and 5, any disruption in output could lead to supply shortages and price spikes.

Jet fuel has fully recovered from the Covid-19 pandemic and there were at least two weeks in 2025 – in early May and late July – during which demand topped 2 million b/d, according to EIA data. Since the agency began tracking jet fuel demand, there have been only eight other weeks where consumption was that high.

The healthy jet fuel demand will likely continue in 2026, but the growth rates of the last several years are likely to weaken. EIA in August projected U.S. jet fuel demand growth will rise by just 1.1% from 2024 through 2026, far below the 12% growth rates recorded as air travel returned to more normal volumes following the pandemic.
The expected slowdown in jet fuel demand is also the result of airlines continuing to add new and more fuel-efficient aircraft. Airlines in quarterly earnings calls said they expected deliveries of the more fuel-efficient planes to rise in 2025 and continue to increase into 2026.

Growth in sustainable aviation fuel production also will play a role in the market in the new year.

An International Air Transport Association study said global SAF supply by 2050 will need to be at about 500 million metric tons/year if the airline industry is to reach its net-zero carbon emissions goal. Worldwide output of SAF in 2025 was at just 2 million mt/year, but is expected to rise in 2026.

EIA in May said it expects U.S. production of “other biofuels,” which includes SAF, to rise by about 20% from 2025. While the report did not provide any specific estimates for SAF alone, the agency added that it believes much of the year-to-year increase in “other biofuels” will come from more SAF output.

IATA said that given current expectations on “global feedstock availability, technology readiness and regional suitability,” it expects global SAF production could reach 400 million mt/year 2050, short of the 500 million mt/year deemed sufficient to reach the sector’s net-zero emission goals.

Despite growing SAF output, the fuel remains a small part of the overall jet fuel supply pool. EIA estimated 2025 SAF output will supply just 2% of U.S. consumption and it expects that percentage share to remain intact in 2026.

Reporting by Cory Wilchek, cwilchek@opisnet.com; Editing by Jeffrey Barber, jbarber@opisnet.com