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SINGAPORE: Asia’s cash premiums for jet fuel climbed to a record high on Tuesday, supported by recovering aviation demand as airlines add capacity on their schedules for the coming months.

Cash differentials for jet fuel surged to $5.31 a barrel to Singapore quotes, an all-time high, according to Reuters data that goes back to late 1998. They were at a premium of $4.90 per barrel a day earlier.

The jet fuel cash premiums have soared nearly 64% in the last two weeks.

“Despite what appears to be a plateauing or reduction of airline capacity over recent weeks, airlines have significantly more capacity scheduled over the coming weeks with the number of seats reaching 100 million by the start of May,” aviation data firm OAG said in a statement.

Global international airline capacity rose 1.5% this week, while scheduled international capacity in South East Asia climbed 5.2%, OAG data showed.

Asian refining margins, or cracks, for jet fuel slipped to $21.91 per barrel over Dubai crude on Tuesday, down from $26.50 a barrel on Monday.

Although the ongoing Russia-Ukraine conflict has led to vast swaths of airspace closures, Refinitiv Oil Research analysts said “the Russian sanctions have no major impact on the jet-kero market in terms of its supply-demand dynamics” as the country is not a major exporter of the fuel.

Ryanair said it aims to achieve a third of its decarbonisation target by flying its planes with sustainable aviation fuels, and will also rely on offsetting measures to cut its emissions to net zero by 2050.

The Irish airline, Europe’s largest by passenger numbers, committed last year to power 12.5% of its flights with sustainable aviation fuels by 2030, although Chief Executive Michael O’Leary has since said he is not sure Ryanair will reach the “very ambitious target.”

Sustainable jet fuel generally produces up to 70% less carbon than fossil fuels, offering airlines a way to become greener while continuing to fly, before less carbon-intensive hybrid, electric or hydrogen aeroplane options become available from the late 2030s.

The European Union’s foreign ministers disagreed on Monday on whether and how to slap sanctions on Russia’s lucrative energy sector over its invasion of Ukraine, with Germany saying the bloc was too dependent on Russian oil to decide an embargo.

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