Think Tanks
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Ifo Institute: Business Climate for Residential Construction in Germany Deteriorates
MUNICH, Germany, June 16 -- ifo Institute issued the following news release on June 15, 2026:
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Business Climate for Residential Construction in Germany Deteriorates
Sentiment in residential construction in Germany has clouded over further: The Business Climate Index fell slightly in May from -28.2 to -29.3 points. Companies assessed their current situation as somewhat worse.
Expectations, on the other hand, improved marginally and remain marked by a great deal of pessimism. "Residential construction remains in a state of uncertainty," says Klaus Wohlrabe. "Many companies do not currently
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MUNICH, Germany, June 16 -- ifo Institute issued the following news release on June 15, 2026:
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Business Climate for Residential Construction in Germany Deteriorates
Sentiment in residential construction in Germany has clouded over further: The Business Climate Index fell slightly in May from -28.2 to -29.3 points. Companies assessed their current situation as somewhat worse.
Expectations, on the other hand, improved marginally and remain marked by a great deal of pessimism. "Residential construction remains in a state of uncertainty," says Klaus Wohlrabe. "Many companies do not currentlyexpect any noticeable upturn in the market."
The order situation improved slightly, with the share of companies reporting too few orders falling from 43.8 to 42.2%.
However, at the same time, the number of cancellations increased: from 10.8 to 11.7%. Concerns about the supply of materials also persist: 9.7% of companies reported bottlenecks for key intermediate products.
"Although companies are receiving slightly more orders again, at the same time, customer uncertainty remains high," says Wohlrabe. "That's evident not least in the renewed increase in cancellations."
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More Information
Survey (https://www.ifo.de/en/facts/2026-06-15/business-climate-residential-construction-germany-deteriorates)
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Original text here: https://www.ifo.de/en/press-release/2026-06-15/business-climate-residential-construction-germany-deteriorates
[Category: ThinkTank]
Center on Budget & Policy Priorities: Virtual Appointments Are the Norm. They Should Be a Permanent Feature of WIC, Too.
WASHINGTON, June 16 -- The Center on Budget and Policy Priorities issued the following commentary on June 15, 2026, by Elisabet Eppes, senior program manager on the Food Assistance Team, and senior fellow Zoe Neuberger:
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Virtual Appointments Are the Norm. They Should be a Permanent Feature of WIC, Too.
In recent years, WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children) has been offering virtual services, including telephone and video certification appointments, as part of a broader modernization initiative. Research shows that waiving in-person requirements
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WASHINGTON, June 16 -- The Center on Budget and Policy Priorities issued the following commentary on June 15, 2026, by Elisabet Eppes, senior program manager on the Food Assistance Team, and senior fellow Zoe Neuberger:
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Virtual Appointments Are the Norm. They Should be a Permanent Feature of WIC, Too.
In recent years, WIC (the Special Supplemental Nutrition Program for Women, Infants, and Children) has been offering virtual services, including telephone and video certification appointments, as part of a broader modernization initiative. Research shows that waiving in-person requirementsincreases WIC participation. But without action by Congress, the temporary waivers allowing these critical flexibilities will expire.
Bipartisan bills in both chambers of Congress would make virtual services a permanent feature of WIC. Unfortunately, the House agriculture appropriations bill for fiscal year 2027 did not address virtual services. Senate appropriators should make WIC virtual services permanent in their fiscal year 2027 funding bill.
A strong body of research demonstrates the positive impacts of WIC participation, including reduced likelihood of food insecurity, preterm birth, low birthweight, and perinatal death and improved diet quality for participants. There is also growing evidence that WIC may reduce racial and ethnic health disparities and help create a healthier food environment in low-income neighborhoods.
Despite WIC's proven benefits, many eligible people are missing out. According to USDA estimates, 56.1 percent of eligible people participated in 2023. Less than half of eligible pregnant people (49.3 percent) and children between the ages of 1 and 4 (47.9 percent) participated. And less than one-quarter of eligible people living in nonmetropolitan areas (24.0 percent) participated.
One way that WIC agencies have increased participation in recent years is by offering virtual services, including telephone or video certification appointments and loading food benefit cards remotely. These flexibilities have helped modernize the program and are especially important for families who have difficulty traveling to WIC offices, including working parents and families in rural areas.
It is common for WIC participants to have four appointments each year, and families with more than one young child often have more. Historically, with limited exceptions, WIC rules required applicants and participants to attend certification and recertification appointments in person, though nutrition education was sometimes offered online or by telephone. WIC-eligible households, particularly those who don't participate in WIC, report that traveling to WIC offices is a key barrier.
The temporary waivers that allow WIC agencies to offer virtual services were authorized in conjunction with a broad modernization initiative. Virtual appointments have been complemented by other digital tools that make it easier to attend appointments and use food benefits, such as online appointment scheduling, text-based reminders, and mobile apps that help identify WIC-authorized foods at the grocery store.
Modernized service delivery has transformed WIC from a program that relied heavily on in-person and paper transactions to one that employs the tools and technology participants are accustomed to in daily life, including for telehealth medical appointments. Telephone certification appointments in particular may reduce barriers to participation, as young families have become accustomed to handling appointments and tasks virtually in recent years. WIC agencies have implemented measures to ensure that families receive the same level of care through virtual appointments as they would from in-person appointments. And families are still seen at least annually by WIC staff or a healthcare provider because WIC requires height and weight measurements as part of the certification process to assess growth and help determine nutritional risk.
WIC agencies also employ measures to ensure program integrity and prevent fraud in the context of virtual services. Improper payments, which often result from errors rather than fraud, are extremely low in WIC (1.4 percent in fiscal year 2024). The rate of improper payments is down from 2.0 percent in 2019, indicating that use of virtual services has not led to an increase in improper use of funds. Detecting and preventing fraud is an important part of the ongoing work that state and local WIC agencies do, as they recognize the importance of being good stewards of federal funding.
Participants and staff both reap the benefits of modernized appointments. Participants are highly satisfied with the hybrid approach and find it easier to enroll or recertify remotely than in person. A recent study found that waiving requirements for in-person appointments increased WIC participation by 11 percent. Some areas in the study did not take full advantage of other options to ease enrollment and retention, such as allowing participants to submit documents by email or text. Implementing certification streamlining measures along with waiving requirements for in-person appointments would have likely resulted in larger participation effects.
Continuing to provide virtual appointments will help reach more eligible families; enroll all eligible children in the household; and keep children on WIC longer, which leads to better diets and access to health care. A USDA study also indicates that WIC staff believe the flexibility of remote options enables them to better serve participants and should be continued. In addition to benefiting participants and staff, knowing that virtual services will be offered permanently would allow some state and local WIC agencies to reduce clinic space, which could reduce costs.
To help more eligible families enroll and renew their benefits, it is critical for Congress to make virtual certification appointments a permanent feature of WIC this year.
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Elisabet Eppes is the Senior Program Manager on the Food Assistance team.
Zoe Neuberger, Senior Fellow
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Original text here: https://www.cbpp.org/blog/virtual-appointments-are-the-norm-they-should-be-a-permanent-feature-of-wic-too
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: Flag Day
MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 14, 2026, by economist John Phelan:
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Flag Day
One of the stories in our new book "Star of the North: Essays in Minnesota History," is that of the 1st Minnesota Infantry Regiment in the Civil War.
These men fought at First Bull Run, the war's first battle, where they lost 20% of their strength; at Antietam, the bloodiest day in American history, where they lost 28% of all men engaged; and, most
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MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 14, 2026, by economist John Phelan:
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Flag Day
One of the stories in our new book "Star of the North: Essays in Minnesota History," is that of the 1st Minnesota Infantry Regiment in the Civil War.
These men fought at First Bull Run, the war's first battle, where they lost 20% of their strength; at Antietam, the bloodiest day in American history, where they lost 28% of all men engaged; and, mostfamously, at Gettysburg. There, these veteran troops launched an attack which they knew would cost them most of their lives. And it did; by the end of the day, 82% of the men who went into battle had been killed or wounded. These were the most severe losses suffered by a Union regiment in a single engagement during the war.
Those Minnesotans had, however, saved the Union line, probably the battle, possibly the war, and perhaps the United States of America.
They did not begrudge their sacrifice. One of those who enlisted explained that he was doing so to fight for "the only flag worth dying for."
People do not give their lives for bits of cloth; they give them for the things they represent. In this case, it was for the ideals enshrined in the Declaration of Independence -- "that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness" -- whose 250th anniversary we celebrate this year.
Presidents, Congresses, and Supreme Court judges come and go, but those ideals, symbolized by that flag, remain. Americans, like those of the 1st Minnesota, have died so that they might.
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John Phelan is an Economist at the Center of the American Experiment.
john.phelan@americanexperiment.org
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Original text here: https://www.americanexperiment.org/flag-day/
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: Cost of Blue Line Extension Project Swells by Another 11%, Up 61% Since 2024
MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 15, 2026, by economist John Phelan:
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Cost of Blue Line Extension project swells by another 11%, up 61% since 2024
We at Center of the American Experiment have been tracking the ever-increasing costs of the Blue Line Extension project since at least 2017.
As recently as March 2024, the project was projected to cost around $2.2 billion. Then, it jumped by 45% to a range of $2.9 to $3.2 billion owing
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MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 15, 2026, by economist John Phelan:
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Cost of Blue Line Extension project swells by another 11%, up 61% since 2024
We at Center of the American Experiment have been tracking the ever-increasing costs of the Blue Line Extension project since at least 2017.
As recently as March 2024, the project was projected to cost around $2.2 billion. Then, it jumped by 45% to a range of $2.9 to $3.2 billion owingto added contingency costs required by the federal government. Last week, the Metropolitan Council announced that the budget had been revised upward again, by $336 million, or 11%. Indeed, since the start of 2024, the Blue Line extension's cost has exploded by 61%.
In a statement to 5 EYEWITNESS NEWS, the Met Council said:
"The increase in budget is a combination of project scope changes and additional contingency. The completion of this Risk Assessment is a significant milestone and means that as soon as the remaining local contributions are identified, the project is eligible to apply for a Full Funding Grant Agreement. The Metropolitan Council is working with Hennepin County to advance the project. We will remain transparent with partners and communities throughout this process."
Originally slated to begin in 2030, services isn't now expected to finish until 2032, with revenue service not starting for another year after that. There is still time for that price tag to go even higher.
This boondoggle is a prime Golden Turkey candidate.
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John Phelan is an Economist at the Center of the American Experiment.
john.phelan@americanexperiment.org
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Original text here: https://www.americanexperiment.org/cost-of-blue-line-extension-project-swells-by-another-11-up-61-since-2024/
[Category: ThinkTank]
Center of the American Experiment Issues Commentary: Childcare/Taliban Connection
MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 15, 2026, by policy fellow Bill Glahn:
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The childcare/Taliban connection
The 205-page U.S. House of Representatives Oversight Committee staff report on fraud in Minnesota includes this incredible detail on page 85,
"In 2017, DHS flagged concerns that the bank account of the owner of a child care center connected with the MMCA was frozen by the Office of Foreign Asset control due to the owner's
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MINNETONKA, Minnesota, June 16 -- The Center of the American Experiment, a civic and educational organization that says it creates and advocates policies, issued the following commentary on June 15, 2026, by policy fellow Bill Glahn:
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The childcare/Taliban connection
The 205-page U.S. House of Representatives Oversight Committee staff report on fraud in Minnesota includes this incredible detail on page 85,
"In 2017, DHS flagged concerns that the bank account of the owner of a child care center connected with the MMCA was frozen by the Office of Foreign Asset control due to the owner'sassociation with the Taliban.405 Despite these concerns, DHS mailed this individual a check for $24,000. 406"
Yes, The Taliban, you read that correctly. In this instance MMCA refers to the Minnesota Minority Childcare Association. The staff report (p. 86) quotes from an internal email within the state Department of Human Services (DHS) back in 2017,
"Within the last few days DHS sent an electronic payment to (REDACTED}. We have been advised that the payment was kicked back by the subject[']s bank (don't have account info yet) due to the center[']s account being frozen by OFAC (Office of Foreign Asset Control). {REDACTED) it appears the owner of the child care center is associated with a TALIBAN official, which is why the account was ordered frozen."
As if that weren't enough, the internal DHS email,
"notes that a redacted individual (likely the same mentioned above) is likely connected to yet another center and has visited Edmonton 11 times, Malaysia 2 times, Somalia 42 times and Kenya 33 times."
Your tax dollars at work. As I mentioned, the committee staff report runs some 205 pages. We will keep digging.
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Bill Glahn is a Policy Fellow with Center of the American Experiment.
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Original text here: https://www.americanexperiment.org/the-childcare-taliban-connection/
[Category: ThinkTank]
Center for American Progress: Report Touts Importance of Religious Liberty for All at America 250
WASHINGTON, June 16 (TNSrep) -- The Center for American Progress issued the following news release on June 15, 2026:
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New Report Touts Importance of Religious Liberty for All at America 250
The Center for American Progress, Americans United for Separation of Church and State, Interfaith Alliance, and the American Humanist Association today published "Religious Liberty for All: Celebrating This Founding Freedom at America 250," a new report featuring 20 prominent voices, including elected officials and faith leaders, on what religious liberty means in their lives and for the nation.
The
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WASHINGTON, June 16 (TNSrep) -- The Center for American Progress issued the following news release on June 15, 2026:
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New Report Touts Importance of Religious Liberty for All at America 250
The Center for American Progress, Americans United for Separation of Church and State, Interfaith Alliance, and the American Humanist Association today published "Religious Liberty for All: Celebrating This Founding Freedom at America 250," a new report featuring 20 prominent voices, including elected officials and faith leaders, on what religious liberty means in their lives and for the nation.
Thereport makes the case for a vision of religious liberty rooted in dignity and the Constitution. It serves as a powerful alternative to the anticipated upcoming report from the Trump administration's so-called Religious Liberty Commission, which has elevated a very narrow ideological perspective, perpetuated Christian nationalist doctrines, and sought to weaken the separation of church and state.
"Religious liberty belongs to all people, not to any single tradition, political party, or administration," the report says. "America's strength lies in protecting the freedom of belief and nonbelief and ensuring that religious liberty is not misused to decide who belongs, whose rights are protected, and who has power."
Elected officials contributing to the report include Sen. Chris Coons (D-DE) and Reps. Yassamin Ansari (D-AZ), Jared Huffman (D-CA), and Jamie Raskin (D-MD). Faith leaders include Rabbi David Saperstein, Union for Reform Judaism; Sunita Viswanath, Hindus for Human Rights; Rev. Terri Hord Owens, Christian Church (Disciples of Christ); Dr. Homayra Ziad, American Islamic College; Rev. Carlos L. Malave, Latino Christian National Network; and many more.
To mark the report launch, the organizers are holding an event at the Center for American Progress in Washington, D.C., on Tuesday, June 16, 2026, from 2:00 p.m. - 3:15 p.m. ET. The event will feature keynote remarks by Sen. Coons, introductory remarks by CAP's president and CEO Neera Tanden, and multiple panel discussions with experts on religious freedom.
The Trump administration's Religious Liberty Commission is expected to release its own report as early as the end of June; the publication has been repeatedly delayed as the commission faces ongoing litigation from diverse faith organizations, including Interfaith Alliance, that allege illegal discrimination in the makeup and actions of the commission. In April, Democracy Forward and Americans United for Separation of Church and State filed a motion to pause the release of the report on behalf of Interfaith Alliance, Muslims for Progressive Values, the Sikh American Legal Defense and Education Fund, and Hindus for Human Rights.
Read the report: "Religious Liberty for All: Celebrating This Founding Freedom at America 250." (https://www.americanprogress.org/article/religious-liberty-for-all-celebrating-this-founding-freedom-at-america-250/)
For more information on this topic or to speak with an expert, please contact Sam Hananel at shananel@americanprogress.org.
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Original text here: https://www.americanprogress.org/press/release-new-report-touts-importance-of-religious-liberty-for-all-at-america-250/
[Category: ThinkTank]
American Action Forum Issues Commentary: High Jet Fuel Premium Changing U.S. Refiners' Priority
WASHINGTON, June 16 -- The American Action Forum issued the following commentary on June 15, 2026, by Energy and Environmental Policy Director Shuting Pomerleau:
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High Jet Fuel Premium Changing U.S. Refiners' Priority
Executive Summary
* The closure of the Strait of Hormuz for over 100 days has disrupted 20 percent of global petroleum supply, driving up U.S. Gulf Coast jet fuel spot prices by 110 percent year over year by mid-May 2026, while U.S. gasoline prices rose 40 percent over the same period.
* In response to this increased premium on jet fuel relative to gasoline, U.S. refiners
... Show Full Article
WASHINGTON, June 16 -- The American Action Forum issued the following commentary on June 15, 2026, by Energy and Environmental Policy Director Shuting Pomerleau:
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High Jet Fuel Premium Changing U.S. Refiners' Priority
Executive Summary
* The closure of the Strait of Hormuz for over 100 days has disrupted 20 percent of global petroleum supply, driving up U.S. Gulf Coast jet fuel spot prices by 110 percent year over year by mid-May 2026, while U.S. gasoline prices rose 40 percent over the same period.
* In response to this increased premium on jet fuel relative to gasoline, U.S. refinershave adjusted their refining processes to maximize jet fuel production to capture the high margins.
* If the recently announced U.S.-Iran agreement leads to a near-term reopening of the strait, it would allow Persian Gulf petroleum exports to resume and stabilize global markets; alternatively, an extended closure will keep crude oil high, prompting U.S. refiners to continue prioritizing high-margin jet fuel exports to Europe and Asia.
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Introduction
Since the start of the Iran conflict, the de facto closure of the Strait of Hormuz for over 100 days has disrupted 20 percent of global petroleum supply, triggering massive price spikes across petroleum products; this energy shock drove up U.S. Gulf Coast jet fuel spot prices by 110 percent year over year by mid-May 2026, while U.S. gasoline prices rose 40 percent over the same period.
Since the U.S. refiners have developed to produce more gasoline than jet fuel, the sudden supply constraints have disproportionately pushed up jet fuel refining margins. U.S. jet fuel crack spread (a measure of the profitability of a petroleum product) surged to a peak of $74 per barrel in March, exceeding gasoline by more than $40 per barrel. In response, U.S. refiners have adjusted their refining processes to maximize jet fuel production and increased output to over 2 million barrels per day.
As the U.S. domestic jet fuel supply climbed above average, the additional supply of jet fuel was mostly exported to Asia and Europe to mitigate the severe shortages. This shift has also created a temporary domestic surplus of gasoline components, as refining crude oil into jet fuel inevitably yields gasoline as a byproduct. The glut of gasoline components does not necessarily lead to lower gas prices at the pump, however, as refiners are constrained by available capacity to blend them into motor gasoline.
On June 14, 2026, President Trump announced that the United States has reached an initial deal with Iran to end the Middle East conflict. As of the publication date, the official signing of the deal is scheduled for June 19 in Switzerland. Official details of the agreement have yet to be released, and it's unclear whether the deal will lead to the full reopening of the Strait of Hormuz.
The future trajectory of U.S. jet fuel and gasoline prices and refining margins will largely depend on the duration of the Middle East conflict and shifting consumer demand. A near-term reopening of the strait will allow Persian Gulf exports to resume and stabilize global markets, whereas an extended closure will keep crude oil high, prompting U.S. refiners to continue prioritizing high-margin jet fuel exports to Europe and Asia.
The Global Oil Disruption
The Strait of Hormuz, a global oil chokepoint, has been effectively closed for more than 100 days since the start of the Iran conflict. The closure of the strait has disrupted about 20 percent of global petroleum consumption at 20 million barrels per day (mbd) shipping from major Persian Gulf oil producing countries to the rest of the world. A previous American Action Forum (AAF) insight provided an analysis of the global energy shock and its short- and long-term implications.
The global oil disruption has led to spikes in prices of crude oil, which in turn are pushing up prices of petroleum products such as jet fuel and gasoline. Brent--a global oil price benchmark--is expected to stay at about $105 per barrel in June and July, compared to the price point around $70 a barrel prior to the Iran conflict.
Despite the unprecedented global energy disruption, crude oil prices have not (so far) skyrocketed as expected by many experts. This relative restraint is due to driven several factors as explained in this AAF analysis, including workarounds via bypass oil pipelines through Saudi Arabia and the United Arab Emirates, reduction in global demand, and drawdowns of global oil inventories. Additionally, the U.S. military has been escorting some ships through the strait recently, allowing about 100 million barrels of oil to reach the global market. Most important, China, as a top global oil consumer, has been slashing its oil imports by at least 30 percent since May, which provides a substantial buffer for the global oil market.
On June 14, 2026, President Trump announced that the United States has reached an initial deal with Iran to end the Middle East conflict. As of the publication date, the official signing of the deal is scheduled for June 19. President Trump noted in his announcement that "I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade." Official details of the agreement have not been released, and it's unclear whether the deal will lead to the full reopening of the Strait of Hormuz in the near term.
U.S. Refineries Are Producing More Jet Fuel To Capture Higher Margins
Higher crude oil prices are pushing up prices of jet fuels and gasoline
As shown in Figure 1, U.S. Gulf Coast jet fuel spot prices increased by 82 percent from an average of $2.30 per gallon in the week of February 20 (before the Iran conflict) to as high as $4.20 per gallon in the week of May 15. Comparing the same week of May 15 in 2025 and 2026, U.S. Gulf Coast jet fuel spot prices more than doubled this year, rising by 110 percent.
Prices have come down to about $3.40 per gallon in the week of June 5 (discussion below). Driven by the conflict with Iran, the peak jet fuel spot price of $4.20 per gallon nearly matched the historic high of $4.60 per gallon seen in 2022, when Russia's invasion of Ukraine triggered a massive global energy shock.
U.S. average retail gasoline prices rose to as high as $4.60 per gallon in May 2026, and decreased slightly to an average of $4.30 per gallon in the beginning of June (Figure 2). This was about a 40-percent increase from May 2025 to May 2026. The spikes in U.S. gasoline prices following the Iran conflict almost reached the historic high levels of about $5.00 per gallon in June 2022 after Russia invaded Ukraine.
U.S. refiners are maximizing jet fuel production to capture higher margins
In the oil industry, crack spread is the price difference between a barrel of crude oil and the refined petroleum products (gasoline, jet fuel, or diesel) it can yield. It is an important indicator of a refinery's profitability measure. Typically, three barrels of U.S. crude oil can yield two barrels of gasoline and one barrel of distillate (jet fuel or diesel). This is called the 3:2:1 crack spread. Since U.S. refining has developed to produce more gasoline than jet fuel, the sudden supply constraints have disproportionately pushed up jet fuel refining margins.
As shown in Figure 3, U.S. Gulf Coast jet fuel crack spread closely tracked the gasoline crack spread prior to the outbreak of the Iran conflict. Following the escalation, however, jet fuel prices far outpaced gasoline prices between March and May. The jet fuel crack spread surged to a peak of $74 per barrel in March, contrasting sharply with gasoline margins, which reached as high as $35 per barrel in the same month. By the week of March 27, the jet fuel crack spread exceeded that of gasoline by more than $40 per barrel, highlighting the substantially higher profitability of aviation fuel production relative to motor gasoline.
In response to the jet fuel's higher prices and profit margins, U.S. refiners have been maximizing their jet fuel production to capture the additional profits. U.S. jet fuel production increased from an average of 1.7 million barrels per day in February to over 2 million barrels per day in the week ending May 1.
To yield more jet fuel from a barrel of crude oil, refiners adjust the refining process in a way that produces more naphtha. Since it is not possible to yield jet fuel from a barrel of crude oil without producing some amount of naphtha, increased jet fuel production inherently increases the supply of this gasoline component in the U.S. market. This glut does not necessarily lead to lower gasoline pump prices, however, as refiners face capacity limits that prevent them from being blended into motor gasoline.
Most of the additional U.S. jet fuel production was exported to foreign markets - including Europe and Asia - as U.S. inventories were 7 percent higher than the 2021- 2025 average.
Additionally, jet fuel prices were traded at higher levels in March and April compared to U.S. Gulf Coast prices due to the significant fuel shortage in Europe and Asia as they relied heavily on jet fuel exports from the Gulf region prior to the Iran conflict.
By the end of May, as shown in Figure 3, U.S. jet fuel and gasoline's crack spreads dropped drastically and their difference narrowed. This is mostly driven by the increased supply from U.S. refiners' increased production and a reduction in demand. As concerns of a looming jet fuel shortage have eased, U.S. jet fuel prices have fallen in early June, as shown in Figure 1.
Looking Forward
Going forward, the trajectory of U.S. gasoline and jet fuel prices as well as their respective crack spreads will largely depend on the duration of the Middle East conflict and shifting consumer demand.
If the strait is reopened over the next few weeks following the signing of the U.S.-Iran agreement, big oil producing countries in the Persian Gulf region would slowly resume exports to the global oil market, eventually leading to lower U.S. gasoline and jet fuel prices. Refining margins of the two fuels will converge as the market recalibrates. Conversely, if the strait remains closed for several more months, persistent global supply constraints will drive crude oil higher, pushing U.S. jet fuel and gasoline prices up. Under this extended disruption, U.S. refiners will continue to chase high-margin jet fuel export pull from Europe and Asia while managing an accumulating surplus of domestic gasoline components.
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Shuting Pomerleau is the Director of Energy and Environmental Policy at the American Action Forum
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Original text here: https://www.americanactionforum.org/insight/high-jet-fuel-premium-changing-u-s-refiners-priority/
[Category: Think Tank]
