Rising freight costs for the type of vessel used to bring jet fuel from the Persian Gulf to Europe have raised the prospect of increased flows in April, shipping and trading sources.

"It seems to be a bit busier on the Persian Gulf to Northwest Europe route lately for jet fuel," said one ship broker.

"Tonnage has cleared out and we're now hearing an LR2 [Long Range 2 vessel] on subs at $2.15 million for Northwest Europe, off April 1-5 dates," he said.

Freight for Long Range 1 vessels - the category most commonly used to bring jet fuel from the Middle East to Europe - were assessed at a lump sum of $1.925 million Thursday, basis 65,000 mt cargoes, for the route to NWE, and $1.825 million for delivery into the Mediterranean with the same cargo size basis, Platts data shows.

Ample tonnage in the region during the refinery turnaround season in January and February saw prices fall to 10-month lows earlier this month. The PG-NWE lump sum price was at $1.75 million on February 8, with the route to the Mediterranean cheaper by $100,000, Platts data shows.

Typical exports from the Persian Gulf to Europe come to term volumes of 1 million-1.1 million mt each month. Any additional availability will be exported to Europe or Asia, depending on arbitrage economics.

"Jan was 1.5 [million mt], Feb was less - would say 1.2 [million mt] max...and I haven't seen a lot of fixtures recently, so that leads me to think that there's less coming [in March], a million," said one jet source.

One jet trader said he expects March arrivals to be the "lowest in several months", after production was curtailed by refinery maintenance.

Those resupply concerns Thursday helped drive the CIF NWE cargo jet premium to ICE 0.1% gasoil futures to more than a five-month high of $92/mt, Platts data shows.

With volumes expected to be no more than around 1 million mt in March, sources said that after maintenance concerns ease, April could surely only see a pick-up.

Source: Platts