SINGAPORE: Emirates General Petroleum Corp (Emarat) has secured an additional term contract with Kuwait Petroleum Corp to purchase jet fuel in anticipation of an increase in domestic demand, industry sources said on Monday.
With Gulf airlines intensifying competition with their European rivals, there is an expected increase in demand for jet fuel in the Middle East region this year, they said.
Emarat has finalised a term deal with KPC to purchase six jet fuel cargoes for delivery over April to December, one of the sources familiar with the matter said.
It is unclear if this is Emarat's first term deal of its kind with KPC, but the deal was finalised in anticipation of premiums for jet fuel surging further on an increase in demand from airlines which are expanding rapidly, the source added.
Emarat already has an existing term contract with Abu Dhabi National Oil Co (ADNOC), importing about 40,000 tonnes of jet fuel every month.
The company has bought 40,000 tonnes of jet fuel in the spot market for loading in May and is expected to purchase an additional spot cargo in September, the source said.
Middle East passenger traffic grew 23.4 percent in February from a year ago, versus 7.6 percent in Europe, according to airlines body the International Air Transport Association (IATA).
Middle East carriers posted the second largest gain in passenger traffic in February, just behind African carriers.
Recent aircraft improvements have put most of the world's population within a direct flight from the Gulf, resulting in airport and fleet expansion and shifting more of the global network map to large hubs such as Dubai from the US and Europe.
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