Global Kerosene Market Analysis: Kerosene Price Forecast for 2026, 2027
As of today, February 11, 2026, the global energy sector is facing a pivotal transition. While the broader oil market is trending toward a structural surplus, kerosene—a critical component for the aviation industry and residential heating—is experiencing unique volatility. This report analyzes the macroeconomic drivers, geopolitical risks, and supply-demand fundamentals shaping the kerosene price trajectory through 2030.
Geopolitical Catalyst: Middle East Insecurity and “Risk Premiums”
The foremost risk to the 2026 outlook is the possibility of insecurity in the Middle East. Specifically, escalating tensions in the Persian Gulf and the potential for disruptions in the Strait of Hormuz have introduced a significant “war premium” into refined product pricing.
Middle Eastern refineries are central to the global kerosene supply chain. Any threat to logistics or production infrastructure—particularly in Iran or Saudi Arabia—could force a rapid shift in market sentiment. While the current market is well-supplied, a localized conflict could spike kerosene prices by $0.15 to $0.25 per liter within a single quarter as “just-in-case” inventory building accelerates.
Key Drivers of Kerosene Prices (2026–2030)
2026: The Year of Divergent Paths
The primary theme for 2026 is the struggle between rising global crude production and regional supply shocks.
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Optimistic Scenario: High output from non-OPEC+ producers (South America and the Permian Basin) creates a glut. If Middle East tensions cool, prices could settle near $0.75/liter.
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Pessimistic Scenario: If Iran-related disruptions remove significant barrels from the market, prices could hit $1.15/liter by Q4.
2027: Inventory Saturation
By 2027, global inventory builds are projected to average 2.7 million barrels per day (b/d), outpacing consumption.
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Optimistic Scenario: A global supply surplus pushes prices down to $0.70/liter.
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Pessimistic Scenario: Under-investment in traditional refining in favor of green energy keeps “crack spreads” high, maintaining prices at $0.98/liter.
2028: The Rise of e-Kerosene and SAF
Environmental mandates, such as the EU’s ReFuelEU and the UK’s SAF mandate, begin to exert pressure on traditional kerosene demand.
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Optimistic Scenario: Rapid scaling of Sustainable Aviation Fuel (SAF) reduces traditional kerosene demand, lowering prices to $0.73/liter.
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Pessimistic Scenario: The high cost of blending synthetic fuels increases the overall “market price” for aviation-grade kerosene to $1.10/liter.
2030: Structural Market Transformation
By the end of the decade, the market will likely be bifurcated between legacy kerosene and carbon-neutral alternatives.
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Optimistic Scenario: A stabilized energy mix leads to a consolidated price of $0.78/liter.
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Pessimistic Scenario: Carbon taxes and legacy refining closures create a supply squeeze for traditional users, pushing prices to $1.25/liter.
Market Forecast Table: 2025–2028
Prices are projected in USD per liter based on global weighted averages.
| Period | Market Condition | Optimistic Forecast (USD/L) | Pessimistic Forecast (USD/L) |
| 2025 Q1 (Est.) | Post-Winter Balancing | $0.82 | $0.85 |
| 2026 Q2 | Geopolitical Peak Risk | $0.78 | $0.95 |
| 2026 Q3 | Demand Peak (Aviation) | $0.76 | $1.02 |
| 2026 Q4 | Supply Glut vs. Conflict | $0.72 | $1.15 |
| 2027 (Avg) | Surplus Dominance | $0.70 | $0.98 |
| 2028 (Avg) | SAF Transition Begins | $0.73 | $1.10 |
Further Reading for Universal Traders
To build a complete perspective on the energy complex, we recommend these core resources:
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Introduction to Kerosene: Understanding the distillation process and chemical properties.
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The Largest Kerosene Producing Countries: A map of global refining hubs.
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The Top Oil Producers: Insights into the upstream suppliers driving the market.
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Gasoline Price Forecast in 2026 and 2027: Analyzing the correlation between road and air fuels.
Your 2028 forecast regarding Sustainable Aviation Fuel (SAF) is intriguing. If environmental mandates push the market towards e-kerosene, do you expect a significant “Green Premium” to be added to the standard kerosene prices for international airlines? Also, how will this affect the Crack Spread for traditional refineries in the Middle East?
Hello Dietrich. The “Green Premium” is almost inevitable in the early stages of the SAF transition. Our analysis at Universal Trades suggests that while SAF reduces demand for fossil-based kerosene, the high cost of carbon-neutral blending will actually keep the blended fuel’s market price elevated. As for the crack spread, refineries that don’t pivot to SAF-ready infrastructure by 2028 might face tighter margins as traditional kerosene becomes a “legacy” product.