South Korea's jet fuel exports hit nine-month high as Hormuz rerouting reshapes product flows
Kpler data showing a 36% jump in South Korean kerosene shipments in May signals how quickly Asian refiners moved to fill the void left by Middle East disruption.
South Korea exported between 8.67 million and 9.46 million barrels of jet fuel in May, a nine-month high and a sharp recovery from the lows of March and April, when refiners were caught off-guard by the Middle East crisis, Kpler estimates show. The rebound came after South Korean kerosene shipments had fallen to a one-year low in April before the 36% monthly surge.3
The scale of the underlying disruption explains the speed of the response. The EIA's May Short-Term Energy Outlook assessed that Iraq, Saudi Arabia, Kuwait, the UAE, Qatar and Bahrain collectively shut in 10.5 million barrels per day of crude production in April following the Strait of Hormuz closure on February 28. Europe and Asia, which previously imported heavily from Middle East refiners, faced an immediate supply vacuum.1
U.S. Gulf Coast refiners moved quickly. Weekly EIA estimates indicate U.S. jet fuel production rose to record highs after jet fuel prices doubled in March, with output redirected toward European and Asian buyers who could no longer rely on Persian Gulf supply.4
South Korean refiners have been equally aggressive. Their share of Asia Pacific jet fuel imports has risen to about 30% year to date, up from 23% for full-year 2025, according to Kpler data. Ivan Mathews, head of APAC analysis at Vortexa, said in early May (2026-05-06) that a rebound in Northeast Asia's jet fuel exports would be led by South Korea as crude arrivals recovered and refiners lifted utilization rates. The arbitrage to the U.S. West Coast remains wide open, and South Korean cargoes have been exploiting it.3
The product trade shift sits inside a broader commodity rerouting. Coal shipments to Japan, South Korea and the European Union rose 27% year-on-year in April, shipping association BIMCO found, as tight gas supplies and LNG shipment disruptions pushed power generators toward alternative fuels. The same mechanism is at work: seaborne suppliers are filling in wherever Middle East flows have been interrupted.2
EIA forecasters now expect global oil inventories to fall by an average of 8.5 million barrels per day in the second quarter of 2026, keeping Brent prices around $106 per barrel in May and June. For the full year, the agency projects inventory draws of 2.6 million barrels per day, sharply wider than the 0.3 million barrels per day decline it had forecast in April — a revision driven by assumptions of a later Hormuz reopening and a longer production recovery period. The combined output of U.S. Gulf Coast refiners and Northeast Asian plants has not been enough to offset the barrel loss from the Middle East.1
ICE Brent front-month was trading at $90.98 per barrel as of Monday (2026-08-17), well below the $106 level EIA projected for May and June in its spring outlook. The gap suggests the market is pricing in some progress toward a Hormuz resolution, or at minimum a less severe supply disruption than EIA assumed. But the production recovery timeline for the six shut-in producers remains uncertain.1
The supply buffer is also thinning. OPEC's spare capacity is now expected to average only 2.5 million barrels per day in 2027, down from the agency's prior forecast of 3.8 million barrels per day, because the UAE drew on its spare capacity earlier than anticipated. Less headroom means a secondary disruption would have a proportionally larger price impact than it would have had before February.1
U.S. LNG export capacity also grew by about 0.9 billion cubic feet per day in April, led by the first shipment from Golden Pass LNG's Train 1 and additional output from Corpus Christi Stage 3, EIA data show. That incremental volume is helping European buyers replace lost pipeline gas but does not directly address the crude and refined product imbalance that has driven the Gulf Coast and South Korean export surge.1
The key variable now is how fast Middle East crude production comes back. If Hormuz reopens sooner than EIA's May assumptions imply, arbitrage margins that are currently incentivizing South Korean refiners to run hard will compress, and jet fuel export volumes will follow. Kpler's crude arrival data for South Korea over the coming weeks will be the first indicator of whether that moment is approaching.3,1