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The spot price of jet fuel around US$85 in early 2026. It has since spiked up to US$95-$100 currently due to the Middle East conflict. Jet fuel is part of the crude oil barrel most exposed to supply disruptions as it tends to have the lowest level of inventories given it needs to be stored in specialised tanks. If China dramatically tighten regional product markets, shortages and disruptions can be acute as China is one of the few countries with spare refining capacity and a large stockpile of crude oil.
The hedging policies of airlines for jet fuels will determine the extent of impact arising from this ME crisis. SIA has a very prudent hedging policies of 5 years spread out within continuous quarters. Wonder what is AAX jet fuels hedging policy as compared with all other major airlines.
Unlike major carriers that hedge 50–80% of fuel, AAX typically hedges much smaller portions. One Research Report indicated around 12% of jet fuel hedged by AAX based on opportunistic hedging strategy (wants maximum pricing policy but higher exposure when oil prices spike). SIA - Structure and discipline hedging. MAS - Balanced hedging. AAX - light and flexible hedging (higher fuel price risks when oil price spikes sharply).