Jet fuel demand is expected to soften next year, even as the aviation sector expands and Middle Eastern airlines add aircraft, routes and frequencies at one of Jet fuel demand is expected to soften next year, even as the aviation sector expands and Middle Eastern airlines add aircraft, routes and frequencies at one of

Jet fuel demand to cool despite Middle East aviation growth

2025/12/16 19:34
  • Post-pandemic recovery complete
  • Growth to slow to 4% from 12%
  • More fuel-efficient aircraft in fleets

Jet fuel demand is expected to soften next year, even as the aviation sector expands and Middle Eastern airlines add aircraft, routes and frequencies at one of the fastest rates globally.

The latest oil report by Emirates NBD, Dubai’s biggest bank by assets, said there will be a “notable cooling” in demand.

Growth is expected to slow to less than 4 percent in the first half of next year, down from an average of more than 12 percent annually from 2023-25.

The slowdown reflects the completion of the global post-pandemic recovery, with aviation now operating at or above pre-Covid levels.

“Demand is normalising to mid-single-digit growth in line with underlying passenger and capacity trends, rather than being driven by network restoration,” Linus Bauer, managing director of Bauer Aviation Advisory, said.

The Middle East passenger market is forecast to reach 240 million passengers in 2026. This is supported by an expected 6 percent growth rate, outpacing the global average of 5 percent, according to the International Air Transport Association (Iata).

John Grant, partner at Midas Aviation and AGBI columnist, said the shift is reinforced by the growing deployment of more fuel-efficient aircraft.

The Airbus A350-900 and A350-1000 aircraft are among the most fuel efficient long-haul widebodies in Gulf airline fleets, including Emirates, Qatar Airways and Etihad.

The Boeing 787-8/9/10 Dreamliner remains a cornerstone of fuel-efficient fleets across the region, particularly with Qatar Airways and Etihad.

At the region’s low cost carriers, the Airbus A320neo Family and Boeing 737 Max offer double-digit fuel burn improvements over previous models, thanks to new engines and aerodynamic efficiency.

Fuel accounts for the largest share of Emirates’ operating expenses, making up 30 percent of costs, underscoring the airline sector’s continued sensitivity to energy prices. 

Against that backdrop, airline fuel bills are expected to edge lower in 2026 to $252 billion, down 0.3 percent from 2025, as Brent crude prices ease to an estimated $62 a barrel, according to Iata. However, any savings are likely to be partly offset by a wider jet fuel crack spread – the difference between the price of refined jet fuel and the price of crude oil – that keeps prices relatively elevated.

Further reading:

  • Emirates chief: Passengers will decide if flying green is worth cost
  • Growing pains: mega orders could strain aviation supply chains
  • Emirates kicks off race between Airbus and Boeing for bigger jets

Jet fuel is forecast to average $88 a barrel, 2.4 percent lower than in 2025. Airlines are benefit as older fuel hedging contracts that locked in fuel at higher prices expire and prices move closer to market levels.

Fuel is set to account for just over one quarter of operating expenses globally, down slightly from a year earlier. 

Efficiency gains are expected to remain limited at about 1 percent. Supply chain constraints are delaying fleet renewal, pushing the average aircraft age beyond 15 years, Iata said. Total fuel consumption is up by almost 3 percent to 106 billion gallons on industry growth.

“Jet fuel has been one of the strongest contributors to incremental oil demand; its deceleration removes a tailwind rather than creating a shock,” said Bauer.

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