It looks like the factors that were plugging the hole in the oil markets have finally run out of steam.

As expected, we’re seeing the return of $100 / bbl oil and $4.00 / gal jet fuel. Even though a temporary pause in Chinese imports of crude, alongside historic pulls from strategic oil reserves, and a healthy dose of messaging to the contrary, oil prices are back to reflecting the market.

We’ve noted crack spreads before, but they’re worth noting again. In short, the price of a barrel of refined fuel will be higher than the price of a barrel of oil due to refining costs. But as oil gets more expensive, that doesn’t (necessarily) mean that the additional cost to refine the fuels also goes up.

And yet, here we are.

In this chart, we’re specifically comparing U.S. fuel prices from the EIA with Brent crude prices. Airlines in the U.S. are consistently reporting over $4.00 / gallon across the network, and while other areas of the globe do tend to deliver higher prices, they still move together (more or less).

What’s interesting is that jet fuel and diesel crack spreads are so much higher in the U.S. compared with gasoline. As we’ve covered before, there are reasons for that, mainly political, though don’t confuse that to mean “bad”. Gas prices are a hotly politicized metric in the U.S., while diesel and jet fuel prices are less so.

But there are other reasons, as well, namely that the U.S. has a lot of light sweet crude that is easily refined into gasoline, while the heavier sour stuff needed to best produce diesel and jet fuel tends to come from other places. As such, the differing crack spreads for gasoline vs the other distillates suggest strain on the refining system.

Of course, the U.S. keeps its own strategic oil reserves, which include a blend of the light sweet and heavy sour. The U.S. has drawn those reserves down below what was considered the minimum level to prevent damage to the salt caverns. Consider that for a moment - for a government messaging as much as it can that everything is fine, it is also incrementally destroying its own strategic storage capacity to do so.

But that’s all old news. The question we urge our clients to ask is: why?

And the reason is simple: because the world is still in the middle of the worst oil crisis it has ever endured, and even though the loss of oil to the market has been slowed, it’s still negative. That makes today worse than yesterday, and tomorrow the worst yet. The recently higher oil prices suggest that the measures countries put into place to get through the peak summer travel season without people noticing- yeah, well, they did it (ish). Now we’re on the back side of that, with a deep hole as a result that is not getting deeper as fast as it was - but is still getting deeper.

Dark fleet estimates suggest about 13 million barrels a day on average are making it through the Strait of Hormuz, only to then be bottlenecked by a slow ship-to-ship transfer operation. They bypass pipelines that are running at max capacity, but we’re still short about 30% of the flows that were leaving the region at the start of 2026.

What does this mean? It means aviation faces real risk from higher fuel prices in the near term (next 9 months), before the promised glut everybody is excited about arrives. Yes, we are ultimately bearish on oil and jet fuel prices, mostly because of the bypass capacity being built and the demand destruction taking place. Today, the bypass pipelines and China’s shift to electric are not enough to fix the oil crisis, but they probably will be in the future.

From a commercial aviation perspective, this creates a timing element to such popular hits like: the narrowbody shortage, mid-life retirements, engine parts escalation.

To repeat one of the most important lines in aviation (or life, really) - the nuance matters.

Monday afternoon in Copenhagen, the market overview presentation starts right after lunch.

The slides have already been sent, and the presentation is full of data and charts (as if I would settle for anything else). But there’s a catch:

Almost all the charts in the presentation come from our premium research, which we keep exclusive to our clients. So come to the presentation and take pictures, record on your phone, hire a courtroom artist, whatever floats your boat, but we won’t be sharing the deck afterward.

We like to create valuable charts. But it’s not easy to come up with new ideas amid the endless hours spent delivering data-driven edge to our customers. In our quest to provide a valuable weekly newsletter, we can keep guessing what you find most valuable, or you could just tell us.

If you have an idea for data visualization, reply to this email and let us know what analysis you’d find most valuable. We’d love to hear from you and will happily name-drop.

As valuable as it is, don't worry; it's entirely free. If you would like to receive analyses like this regularly, subscribe below.

Then...

You can pay it forward by sending it to your colleagues. They gain valuable insights, and you get credit for finding new ideas!

Win-win!

Subscribe here