Airlines Pair Surcharges With Proxy Hedges to Double Dip on Crude
Bloomberg
Airlines with strong pricing power can reap windfall profits during energy spikes because passenger fuel surcharges make them structurally long oil, allowing carriers to harvest revenue gains while simultaneously cashing in on derivative hedges.
AI-assisted summary of How Airlines Actually Hedge Higher Fuel Prices — original source. Check the original for full context.
Source published:
Key ideas
- Airlines rarely hedge physical jet fuel directly due to thin liquidity and opaque price-reporting mechanisms; instead, global carriers use Brent crude futures as a proxy, leaving them heavily exposed to volatile refining crack spreads. (10:00)
- Fuel surcharges correlate between 75% and 88% with benchmark crude, functionally turning airlines into synthetic oil producers that can hedge by selling options strangles backed by commercial passenger pricing power. (33:28)
- Severe derivative losses during the 2014-2015 crash and the 2020 pandemic—including over $1 billion lost at Delta—led many carriers to abandon financial hedging in favor of passing fuel costs directly to travelers. (8:15)
- To exploit a 70-cent per gallon price disparity between home supplier Woqod and Dubai, Qatar Airways ran regular Boeing 787 tankering flights to import up to 100 metric tons of cheaper jet fuel per trip into Doha. (43:26)
Detailed notes
## Background Published by Bloomberg on October 2, 2026, via web and podcast feeds, this episode of Odd Lots features former Qatar Airways Group Treasurer David Kang breaking down the secretive mechanics of airline fuel risk management. According to the episode description, Kang explains how carriers utilize derivatives like swaps and options, why illiquid jet fuel forces airlines to hedge with proxies like Brent and heating oil, and how ticket surcharges mirror the economics of oil refineries.
## TL;DR While airlines are traditionally assumed to be purely short jet fuel, former Qatar Airways treasurer David Kang explains that carriers operate like oil refineries, utilizing liquid proxies like Brent crude and heating oil because direct jet kerosene derivative markets are thin and easily manipulated. After inheriting a $360 million paper loss, Kang realized that consumer fuel surcharges make an airline structurally long oil, allowing him to pioneer a covered short strangle strategy that generated a $130 million windfall and funded predatory fare cuts. The episode also explores why painful historical crashes in 2014 and 2020 drove many carriers to abandon derivative hedging entirely, turning instead to dynamic passenger pricing and clandestine fuel-tankering operations.
## Atmosphere & style The discussion carries the sharp, engaging vibe of an insider tell-all, pairing Joe Weisenthal and Tracy Alloway's witty, curious banter with David Kang's seasoned, trading-desk candor. Kang recounts tense executive showdowns, boardroom 'hospital passes,' and razor-thin fuel runs with dry humor and clear-eyed pragmatism. Listening feels like gaining access to a closely guarded corporate playbook, transforming what usually sounds like sterile treasury accounting into a lively narrative of high-stakes commodity trading and commercial gamesmanship.
## Bulletin - `10:00` Airlines rarely hedge physical jet fuel directly due to thin liquidity and opaque price-reporting mechanisms; instead, global carriers use Brent crude futures as a proxy, leaving them heavily exposed to volatile refining crack spreads. - `33:28` Fuel surcharges correlate between 75% and 88% with benchmark crude, functionally turning airlines into synthetic oil producers that can hedge by selling options strangles backed by commercial passenger pricing power. - `08:15` Severe derivative losses during the 2014-2015 crash and the 2020 pandemic—including over $1 billion lost at Delta—led many carriers to abandon financial hedging in favor of passing fuel costs directly to travelers. - `43:26` To exploit a 70-cent per gallon price disparity between home supplier Woqod and Dubai, Qatar Airways ran regular Boeing 787 tankering flights to import up to 100 metric tons of cheaper jet fuel per trip into Doha.
## Key takeaways - `00:00` Fuel is an airline's second-largest operating cost after labor, but its extreme volatility makes it the single most dangerous line item on the corporate balance sheet. - `03:42` Hedging combined with fuel surcharges functions as an asymmetric margin engine: carriers can lock in lower fuel expenses financially while simultaneously collecting inflated surcharges from price-tolerant passengers. - `08:15` US carriers largely abandoned derivative hedging after suffering steep cash losses during the 2014–2015 crude crash and the 2020 pandemic lockdowns, opting instead for operational pass-through pricing. - `10:00` Because jet kerosene is an illiquid market with no natural sellers other than refiners, carriers hedge with proxies like Brent crude or heating oil, exposing themselves to massive crack spread volatility. - `20:00` Published jet fuel price marks from agencies like Platts and Argus often rely on subjective assessments rather than cleared bids and offers, further driving airlines toward standardized futures contracts. - `22:04` The Singapore jet fuel market operates as an insular oligopoly dominated by major commodity trading houses and oil majors, deterring global airlines from running direct hedge books there. - `24:14` Base airfares can represent as little as 25% of the total ticket price during high-oil environments, while surcharges flow straight into operating revenue and derivative gains hit separate hedge-accounting lines. - `26:44` Qatar Airways faced uniquely elevated fuel risk: jet fuel comprised 44% of its operating costs due to cheap international labor, vastly exceeding the typical 25% to 30% industry average. - `30:00` Falling crude prices create an operational 'double whammy' when paired with economic slumps: passenger volumes drop, flights are grounded, and carriers are left holding massive paper losses on fixed-price swaps. - `31:35` An airline seat is a perishable asset comparable to retail produce; once an aircraft departs, unused seat capacity cannot be inventoried or reclaimed. - `33:28` Regression analysis revealed ticket surcharges have an 87% to 88% correlation with Brent crude, effectively making the airline's revenue department structurally long energy. - `35:54` Qatar Airways monetized this dynamic by selling short strangles: customer surcharges covered upside call risk, while reduced physical jet fuel costs offset downside put liabilities. - `40:00` A $130 million windfall generated by Kang's short strangle hedge offset a $65 million passenger revenue loss and funded a 20% fare cut that undercut Gulf rivals Emirates and Etihad. - `45:00` Qatar Airways used newly delivered Boeing 787s on training flights to tanker cheap aviation fuel out of Dubai, bypassing an inflated $3.65/gal charge from domestic state supplier Woqod. - `50:00` Regional infrastructure bottlenecks in PADD 3 and New York Harbor force the US East Coast to compete directly with Europe for waterborne diesel and distillate imports, distorting global crack spreads. - `54:38` High headline energy inflation provides airlines with consumer cover to aggressively raise airfares and surcharges without destroying passenger travel demand.
## Detailed walkthrough ### `00:00` The Secrecy of Airline Finance and the Mechanics of Fuel Costs
Airlines operate some of the most capital-intensive, operationally demanding businesses in the world, yet they maintain a legendary reputation for corporate secrecy. Tracy Alloway recalls her days as a transportation reporter, noting that two documents remained perpetual holy grails she could never get her hands on: an actual completed aircraft purchase contract detailing the steep discounts carriers negotiate off list price from manufacturers like Boeing or Airbus, and a transparent look at an airline's fuel hedging strategy. Whenever crude oil prices spike, market commentary reflexively pivots to a single question: "Did they hedge their fuel?" But as Joe Weisenthal points out, the financial discussion almost always terminates right there. If the airline hedged, market participants nod approvingly; if they didn't, the stock takes a hit—yet virtually no one outside the corporate trading desks understands how these massive financial operations are actually constructed or executed.
Fuel ranks as an airline's second-largest operational expense after labor, but it is by far its most volatile. Conventional wisdom assumes hedging is straightforward protection against rising jet fuel costs, allowing carriers to lock in an expense baseline so they are not caught flat-footed by geopolitical disruption or refining crunches. However, airlines possess a dual-lever pricing dynamic. When jet fuel surges, carriers do not simply rely on derivatives; they simultaneously raise airfares and slap fuel surcharges onto tickets. During inflationary periods and widespread supply panics, consumers are already primed by the news to accept surcharges without severe pushback. This dynamic can hand an airline an enormous margin windfall: if a carrier locks in lower fuel prices through financial hedges while simultaneously collecting elevated surcharges from travelers eager to fly, the hedge becomes an active profit engine rather than a passive safety net.
`03:42` The Hedging and Surcharge Playbook: Creating a Competitive Edge
The asymmetrical nature of fuel hedging transforms risk management into a vicious competitive battleground. If an airline has successfully locked in its fuel costs at lower levels while its direct competitors have left their exposure unhedged, the unhedged rivals face a painful dilemma: either drastically hike ticket prices to cover their fuel bill and risk losing volume, or absorb crushing operating losses. Meanwhile, the hedged airline can undercut competition, defend margins, or maintain surcharges while operating on an artificially suppressed cost base. Despite soaring airfares, passenger volumes have defied traditional economic drag, shattering TSA screening milestones and setting fresh global travel records.
```mermaid flowchart TD accTitle: Airline Fuel Surge Response accDescr: The two distinct levers airlines pull when oil spikes: derivative hedging and passenger surcharges.
subgraph CostDefense["Financial Defense"] Hedge["Derivative Fuel Hedges<br/>(Swaps & Options)"] --> LockedCost["Capped Jet Fuel Expense"] end
subgraph RevenueLever["Commercial Pass-Through"] OilSpike["Jet Fuel / Crude Spike"] --> Surcharge["Fuel Surcharges & Higher Fares"] Surcharge --> Traveler["Passed to Passenger"] end
LockedCost --> MarginExpansion["Expanded Operating Margin vs Unhedged Rivals"] Traveler --> MarginExpansion ```
This hedging dynamic has historical precedent. Southwest Airlines famously pioneered an aggressive fuel hedging framework in the early 2000s that insulated the carrier for years, transforming financial treasury management into a formidable commercial advantage that other legacy carriers scrambled to emulate. Tracy reveals a personal connection—her father flew as a pilot for Southwest for decades, leaving a significant portion of her inheritance tied up in Southwest stock. As Joe attempts to swivel his monitor to show her the company's long-term stock chart, Tracy humorously protests, pleading with him not to "zoom out" on the performance, before Joe concedes that the visual isn't quite as catastrophic as anticipated.
- **Fuel's cost ranking**: Fuel is the second-largest operational expenditure for major airlines, directly behind labor costs, but exhibits vastly higher volatility. - **The dual-lever advantage**: Airlines hedge commodity prices on the financial side while preserving the ability to institute commercial fuel surcharges on the revenue side. - **The Southwest playbook**: Southwest Airlines served as the industry archetype for turning fuel hedging from simple risk mitigation into a decisive competitive weapon.
`05:48` Introducing David Kang: From Bond Desks to Qatar Airways Treasury
To untangle the opaque mechanics of aviation fuel trading, Tracy and Joe bring on David Kang, former Group Treasurer at Qatar Airways, calling in late at night from Singapore. Kang's journey into aviation risk management came through decades on institutional trading desks across global financial hubs. He started his career in Toronto trading foreign exchange before moving to New York to trade interest rates for a Canadian bank at 425 Lexington Avenue. Returning to Singapore, he joined NatWest, which dispatched him to London to trade sovereign government bonds, followed by a stint as a bond trader for a Japanese trading house that ended abruptly when he lost his position during the 1998 Asian Financial Crisis.
Faced with a career reset, Kang transitioned into commodities, spending six to seven years as a physical oil broker. In 2006, the managing director and head of commodities for Asia at JPMorgan recruited him to join their desk as a commodities structurer. From investment banking, Kang moved back to the Japanese trading house Sumitomo as head of trading for Asian commodity products, accumulating deep expertise across coal, liquefied natural gas (LNG), and refined petroleum products. By the time he joined Qatar Airways—where he served from 2011 to 2013—he brought an elite institutional trader’s understanding of commodity derivatives, crack spreads, and energy market microstructures into the corporate treasury of one of the world's most aggressive, fast-growing global airlines.
`08:15` The Role of Airline Treasurers and Why US Carriers Stopped Hedging
Kang clarifies that his formal title at Qatar Airways was Vice President of Treasury and Risk Management, an executive mandate focused squarely on protecting the entire enterprise across all financial exposures—spanning liquidity, interest rates, currencies, and energy commodities. In plain terms, the treasurer's core responsibility is to financially insulate the airline from exogenous market shocks so flight operations can function without balance-sheet contagion.
When asked why many prominent US airlines have pulled back from active fuel hedging compared to their international counterparts, Kang points to painful historical scar tissue: - **The 2014–2015 oil crash**: Crude oil prices collapsed from over $100 a barrel down to the $40s, leaving aggressively hedged US carriers locked into underwater swap contracts and paying hundreds of millions of dollars above spot fuel prices while unhedged competitors enjoyed immediate cost relief. - **The 2020 pandemic shock**: When global travel collapsed during the initial COVID-19 lockdowns, airlines found themselves paying out massive derivative settlements on fuel they never burned. Delta Air Lines, for example, took derivative losses of over $1 billion on its fuel hedges in 2020. - **Reliance on consumer pass-through**: Having been repeatedly burned by downside market moves, smaller US carriers and select legacy airlines abandoned financial derivatives altogether, opting instead to treat fuel as a purely operational expense passed directly to passengers via dynamic fare algorithms and fuel surcharges.
`10:00` Surcharges, Refinery Cracks, and Why Airlines Use Proxies
David Kang breaks down how fuel costs actually make their way into passenger fares. While tickets often list a generic "fuel surcharge," airlines never display the exact percentage breakdown to travelers. In fact, many carriers have eliminated itemized surcharges entirely, opting instead for a flat all-in ticket price: you pay the fare, you fly, and the airline absorbs or manages the fuel component behind the scenes. This dynamic explains why many U.S. domestic airlines largely abandoned active fuel hedging programs; they lacked the immense balance sheets and large-scale hedge books required to absorb bilateral derivatives risk without jeopardizing cash flow. In contrast, large international flag carriers maintain deep balance sheets, expansive revenue books, and active hedge books, enabling them to impose surcharges on tickets while simultaneously hedging consumption on the procurement side.
```mermaid flowchart TD accTitle: Airline Hedging and Margin Management Workflow accDescr: Flow diagram showing how airlines mirror oil refineries by hedging crude proxies while managing jet fuel exposure and ticket surcharges.
subgraph Inputs["Upstream Procurement & Proxies"] direction TB B["Crude Proxy: ICE Brent / Heating Oil<br/>(Liquid bilateral market)"] J["Physical Jet Fuel Exposure<br/>(Illiquid / Thin trading market)"] B -. "Crack Spread Risk".-> J end
subgraph Operations["Airline Operational Scale"] direction TB C["Fleet Expansion: ~1.5 aircraft/month"] R["Network Growth: New route every 2 months"] V["Consumption: 24M–27M bbls/yr (+3M/yr)"] C & R --> V end
subgraph Outlets["Revenue & Risk Protection"] direction TB H["Hedge Book: Swaps, Collars & Exotics"] S["Passenger Revenue & Fuel Surcharges"] end
Inputs --> Operations Operations --> Outlets ```
To explain the mechanics, Kang draws a direct parallel between an airline and an oil refinery. A refinery feeds crude into a crude distillation unit (CDU) to yield a cascade of products: liquefied petroleum gas (LPG) at the top, gasoline, naphtha, middle distillates like jet kerosene and gasoil, down to heavy residual fuel oil. Refineries hedge by "selling the crack"—the spread between refined product revenues and crude input costs. Airlines face the exact same structural dynamic in reverse. At Qatar Airways, managing these dynamics required immense scale: - The carrier operated on a roughly $6.6 billion balance sheet. - Annual fuel consumption started between 24 million and 27 million barrels, growing steadily by roughly 3 million barrels each subsequent year. - Operations expanded rapidly, taking delivery of approximately 1.5 aircraft per month and launching a new international route roughly every two months. - Fuel demand was forecasted three years out based on scheduled deliveries and planned network expansions.
A central problem in aviation risk management is that the market for actual jet kerosene—such as Northwest Europe CIF Jet—is far too thin and illiquid to support large institutional hedge books. Because airlines are essentially the only natural buyers in the world for jet fuel, an airline cannot execute mega-hedges directly in jet derivatives without moving the price against itself. Instead, global carriers use liquid Brent crude futures as their trading proxy, while U.S. carriers historically turned to NYMEX heating oil. Trading liquid Brent contracts allows airlines to tap deep pools of liquidity on both sides of the market. On the physical delivery side, airlines buy jet fuel directly from major energy traders and financial institutions; Kang notes having purchased physical jet fuel directly from commodity merchants like Glencore, Mercuria, and Vitol, as well as Wall Street commodity desks including Morgan Stanley and Goldman Sachs.
---
`15:43` Plain Vanilla Swaps and Zero-Cost Collars
When asked to unpack the standard trades behind airline hedging programs, Kang walks through the core vanilla playbook. The most foundational instrument is the commodity swap, priced directly off the forward curve. A swap locks in a fixed price symmetrically: - If the market price rallies, the airline's hedge pays out, successfully capping fuel costs. - If market prices plunge, the airline suffers steep cash losses on the swap, "bleeding" capital while paying above-market rates.
Because of this symmetry, swaps are most appealing when oil trades at depressed levels in the lower double digits—around $25 to $35 a barrel—where upside exposure dominates downside risk. Once crude reaches elevated tiers around $70 to $80 a barrel, treasurers become wary of locking in high fixed costs and pivot toward option-based strategies. To protect against runaway spikes without downside cash lock-in, airlines purchase call options. However, outright calls require paying an upfront cash premium. Because many airlines are reluctant or unable to spend cash on options insurance, they construct "zero-cost collars": funding the purchase of an upside call by simultaneously selling an out-of-the-money put option, setting a defined ceiling and floor for fuel expenses with zero initial cash outlay.
---
`17:28` Target Redemption Notes, Exotics, and Spread Exposure
Beyond simple collars, Kang details how investment banks structure exotic derivatives for corporate treasuries, drawing on his experience designing structured products at J.P. Morgan. Banks frequently package fuel hedges as target redemption notes (TARNs). In these structures, an airline enters what appears on the surface to be a standard zero-cost collar, but the bank embeds an exotic component on the back end that automatically terminates or redeems the trade after a set period (such as 5 months, 1 year, or 2 years) once a cumulative profit target is reached:
| Strategy | Structure Mechanics | Payoff Profile & Use Case | |:--- |:--- |:--- | | **Commodity Swap** | Fixed-for-floating price derivative based on forward futures curve | Symmetric: locks in exact fuel costs; ideal when crude is low ($25–$35/bbl), dangerous in high markets ($70–$80/bbl). | | **Zero-Cost Collar** | Buy OTM Call + Sell OTM Put | Provides a capped cost ceiling funded entirely by surrendering downside below the put strike; requires no upfront cash. | | **Target Redemption Note (TARN)** | Vanilla collar combined with structured early-redemption feature | Allows airline to buy in-the-money calls at favorable rates in exchange for capping total duration or upside payout via auto-redemption. | | **Short Strangle** | Sell deep OTM Calls (e.g., >$120) + Sell deep OTM Puts (e.g., <$80) | Generates premium income for the airline as long as oil remains range-bound between the two strikes. |
By coupling the hedge to structured exotic features like TARNs or extendable options, dealers can offer the airline synthetic call options struck deep "inside the money" at highly advantageous entry levels. Kang also structured short strangles: selling wings above $120 per barrel and below $80 per barrel. As long as crude traded within that designated $80 to $120 corridor, the airline collected and kept the option premiums paid out by investment banks.
The hosts react with surprise, noting that target redemption notes are typically recognized in Asian wealth management as speculative retail products sold to "mom and pop" investors wagering on equities like the Kospi, rather than tools used for industrial airline fuel procurement. Kang's explanations lead directly into the broader risk inherent in using crude proxies: because carriers hedge using Brent rather than jet fuel itself, the airline remains fundamentally exposed to the fluctuating "crack spread"—the basis risk between crude oil and refined jet kerosene.
`20:00` Proxy Hedging, Refining Cracks, and the Opaque Jet Market
David Kang addresses the fundamental mismatch in airline fuel hedging: airlines physically burn Jet A-1, so naturally they are exposed to the jet fuel market and ought to hedge with jet contracts. However, the direct jet fuel derivatives market is simply far too thin. Faced with the reality that "it's better to have a hedge on than no hedge at all," carriers turn to liquid proxies. International airlines overwhelmingly default to Brent crude, while US carriers lean on West Texas Intermediate (WTI) or, more commonly, heating oil (New York Harbor ultra-low-sulfur diesel). Heating oil is chemically much closer to kerosene, resulting in a significantly tighter crack spread against jet fuel in the United States than crude provides.
The volatility of these crack spreads can reach staggering extremes. Kang recalls periods where the US heating oil crack over WTI blew out past $100—spiking to roughly $107—which translated to a massive $230 per barrel product price while crude sat at $110 and Brent hovered near $120. In Europe, gasoil cracks were commanding roughly $74 to $75 per metric ton. Tracking the actual jet fuel market in Europe is notoriously difficult because there is no true, centralized open market for it. Instead, price reporting agencies like Platts and Argus assess and publish daily marks. Kang cautions that these published figures are often completely arbitrary: agencies might see a lone bid with no accompanying offer and unilaterally mark up the price assuming an offer exists, or see an offer without a bid and arbitrarily pick a number. Because airlines and traders distrust these opacity-plagued assessments, they bypass direct jet marks entirely and peg their hedges to standardized, liquid benchmarks like ICE London gasoil or NYMEX heating oil.
```mermaid flowchart TD accTitle: Airline Proxy Hedging Structure accDescr: Diagram illustrating physical jet fuel consumption mapped to benchmark derivatives due to thin underlying liquidity.
subgraph Physical["Physical Consumption"] A["Burn Jet A-1 Fuel<br/>(Illiquid / Opaque Market)"] end
subgraph Proxies["Liquid Hedging Instruments"] B["ICE Brent Crude<br/>(Global Carriers Default)"] C["NYMEX Heating Oil / WTI<br/>(US Carriers - Closer Spread)"] D["ICE London Gasoil<br/>(European Benchmark)"] end
A -.->|"Spread Risk / Tracking Error"| B A -.->|"Refining Crack Exposure"| C A -.->|"Distillate Substitute"| D ```
- **Extreme Product Spreads**: Heating oil cracks over WTI reached $107/bbl, creating an implied refined product cost of $230/bbl against a $110 WTI crude benchmark. - **European Gasoil**: Traded at roughly a $74 to $75 crack spread per metric ton. - **Pricing Agency Mechanics**: Platts and Argus assessments often lack two-way quotes; without firm resting bids or offers, published jet marks represent subjective estimates rather than cleared market transactions.
`22:04` The Illiquidity and Manipulation of Singapore Jet Fuel
Joe Weisenthal points to a terminal chart illustrating market divergence: following the outbreak of war in early February, Brent crude rose approximately 50% by March, while Singapore jet fuel surged over 100%, more than doubling. In such an environment, an airline diligently hedged in Brent would still hemorrhage cash if forced to procure physical supplies indexed to Singapore jet. Joe sheepishly admits to watching this spread on his screen "in ignorance" and asks Kang to unpack what is really happening beneath the surface.
Kang explains that the Singapore jet market is an entirely "different animal." It is tightly controlled by a small clique of major commodity trading houses and integrated oil majors. These players hold immense leverage because they know the only natural, non-negotiable buyers in the market are commercial airlines needing physical delivery. Kang dryly understates the market dynamic: "Sometimes people talk to each other... And they agree on something. And then what they agreed on happens because all of them are looking the same way and are trading the same way." Because it is an insular, subjective club rather than a transparent, competitive auction, almost no global airline attempts to run an active financial hedge book directly in Singapore jet—with the sole exception of the local incumbent carrier, Singapore Airlines.
`24:14` Ticket Pricing, Fuel Surcharges, and "Double Dipping"
Tracy Alloway asks why airlines bother hedging complicated derivatives at all if they can theoretically pass higher fuel expenses directly to passengers through elevated base fares and fuel surcharges. Kang replies that the real vulnerability appears when oil prices crash alongside economic downturns, citing 1998, 2008, 2020, and broader geopolitical conflicts like the 2026 tensions involving Iran, the US, and Israel. When crude falls during a recession, passenger demand craters, ticket prices must drop to stimulate traffic, and fuel surcharges become commercially unviable. Hedging with instruments like swaps, purchased calls, or zero-cost collars protects the carrier's baseline when prices inevitably rebound off cyclical bottoms.
When energy prices surge, savvy airlines can effectively profit from both sides of the balance sheet. A ticket operates like a refined product out of a refinery: base airfare and the fuel surcharge are bundled together, with Kang estimating that base airfare often represents as little as 25% of the total ticket cost during high-price regimes. Crucially, fuel surcharges flow quietly through operating revenues, while paper derivative gains flow directly through the hedge accounting line on the P&L. If consumer demand remains robust despite geopolitical unrest and passengers are willing to absorb exorbitant surcharges, a well-positioned airline captures elevated top-line cash flow from travelers while simultaneously booking massive trading profits on its derivative contracts—effectively making "twice as much money while you can."
- **Base Fare Breakdown**: In high-fuel environments, pure base airfare accounts for roughly 25% of the total ticket price paid by the customer, with surcharges and taxes dominating the rest. - **Accounting Separation**: Fuel surcharges sit inside operational passenger revenue, whereas financial hedges mark to market directly through the P&L/OCI, obscuring the combined windfall.
`26:44` Qatar Airways' Cost Structure and the $360 Million Hospital Pass
The urgency of fuel hedging varies wildly across the aviation industry based on cost composition. While typical global carriers see jet fuel account for 25% to 30% of operating expenses—trailing labor as their primary expense—the breakdown at Qatar Airways was fundamentally different. Because Qatar sourced flight crews and cabin personnel globally from regions like Eastern Europe and parts of Asia, its labor costs remained exceptionally low relative to Western competitors. Consequently, jet fuel accounted for a staggering 44% of Qatar Airways' total operating expenditures. Managing that massive exposure was existential, requiring Kang to design bespoke financial strategies.
Kang recounts an anecdote from his early days at the carrier, stepping into the corporate treasury role after years on commercial trading desks. Upon arrival, he inherited an existing hedge book already sitting on a $280 million mark-to-market loss. As he was still navigating corporate bureaucracy and determining how to add value, market movements drove the paper loss deeper, hitting a deficit of $360 million.
The staggering loss prompted the Chief Executive Officer to summon both Kang and Chief Financial Officer Daniel Ho into his office for an explanation. The CEO turned to Ho and demanded, "Dan, why are we down $360 million?" In response, the CFO promptly handed Kang what he describes in rugby terms as a classic "hospital pass"—lobbing the responsibility directly to the newcomer right before the tackle hits. Facing the CEO's fury, Kang had to steady the room and explain the core mechanics of treasury hedging: when oil prices drop, paper derivative losses on swaps are visually painful on the balance sheet, but they are economically offset because the airline's real-world physical fuel burn suddenly costs far less cash.
- **Qatar Airways Fuel Proportion**: 44% of total operating expenses, compared to 25–30% at conventional global carriers with higher domestic labor costs. - **Inherited Hedge Book Deficit**: Started at negative $280 million before widening to negative $360 million, prompting executive intervention.
`30:00` The Double Whammy and the CEO Mandate
During a severe global economic downturn, the airline faced what David Kang describes as a devastating "double whammy." When oil prices tumble, the underlying cause is typically that the global economy is stalling. For Qatar Airways at the time, that meant planes were flying empty or could not be filled enough to justify taking off at all. Grounding flights left unburned fuel inventories, resulting in concurrent losses: ticket revenue plummeted while the corporate hedge book was deeply in the red because fuel was locked in at higher fixed prices.
This dynamic culminated in a tense confrontation with the Qatar Airways CEO. The executive was unequivocal with Kang: "David, you're the group treasurer. I do not want to see you write any more books on the balance sheet. Do you understand?" Kang left that high-stakes encounter fully aware that traditional hedging methods were failing the company. He could no longer rely on vanilla approaches that generated massive paper losses. To survive the mandate, he had to engineer a novel, creative risk management structure where the treasury would either break even or turn a profit—with zero red ink allowed on the corporate balance sheet.
`31:35` Perishable Inventory: Airlines as Flying Grocery Stores
Reflecting on Kang's dilemma, the hosts draw an analogy between commercial aviation and running a retail grocery business. An airline consultant once noted that both industries deal in highly perishable fixed capacity. If a grocery store fails to sell ten bags of lettuce or heads of cauliflower on the day, the inventory spoils and the money is eaten completely. Similarly, an airplane seat cannot be stored in inventory; the moment the cabin door shuts and the aircraft pushes back from the gate, that seat's revenue potential for that departure vanishes forever.
While an airline's balance sheet is dominated by heavy, long-term capital assets like airplanes, its daily operational revenue relies entirely on clearing perishable capacity at the right price on a specific date. In an economic slump, this fixed-cost profile exacerbates downward pressure on margins. It highlights the acute challenge Kang faced: every trader's boss fundamentally issues the same directive—"stop losing money" and "do better"—yet an airline treasurer must execute that mandate inside a rigid, perishable operating environment.
`33:28` Discovering the Hidden Long: Fuel Surcharges and Correlation Analysis
Tasked with eliminating hedge losses, Kang drew upon his background as an oil trader, reframing the airline not merely as an end-user of jet fuel, but as an entity fundamentally similar to an oil refinery. A refinery functions simultaneously as a consumer of crude and a producer of refined fuels. Analogously, an airline consumes jet fuel to produce a physical product: a seat transporting a passenger from Point A to Point B. Kang's team began deconstructing the revenue architecture of that seat until they isolated the passenger ticket's fuel surcharge.
By running statistical regressions against market benchmarks, Kang uncovered a structural link that redefined their exposure: - Fuel surcharges on passenger tickets exhibited an approximate 75% correlation with jet fuel and an 87% to 88% correlation with Brent crude. - The airline used Brent as a liquid proxy, recognizing that the fuel surcharge was a market-facing product that made the commercial side of the business naturally long oil. - This realization enabled a dual framework: traditional *consumption hedging* (covering physical burn) paired directly with *revenue hedging* (leveraging ticket surcharges).
Armed with these figures, Kang approached the revenue management department, meeting with Senior Vice President Anko van der Werff and his right-hand man, Sven Larsen. The commercial team had never viewed their pricing algorithms through a financial trading lens. Kang had to explain that by embedding elastic fuel surcharges into customer fares, revenue management had inadvertently put the airline structurally long oil.
```mermaid flowchart TD accTitle: Dual Airline Exposure Framework accDescr: Diagram showing how ticket surcharges create a long position offsetting the physical short fuel burn position.
subgraph PhysicalOps["Physical Airline Operations"] A["Need Jet Fuel to Fly Planes"] --> B["Naturally SHORT Fuel"] end
subgraph CommercialPricing["Commercial Ticket Pricing"] C["Fare with Fuel Surcharges"] --> D["75% to 88% Correlation to Brent"] D --> E["Naturally LONG Fuel"] end
subgraph TreasuryStrategy["Treasury Hedge Integration"] B & E --> F["Balanced Producer-Style Positioning"] F --> G["Sell Short Strangle with Embedded Cover"] end ```
`35:54` The Non-Naked Strangle: Producer-Style Revenue Hedging
Recognizing that the carrier was structurally short physical fuel to fly its fleet but structurally long fuel via customer ticket surcharges, Kang shifted Qatar Airways away from pure consumer hedges toward a "producer hedge" structure: selling an options strangle (simultaneously selling out-of-the-money calls and puts) to harvest premium without taking directional bets.
Crucially, this strangle was not a naked options play: - **Upside Call Protection:** When the airline sold calls, the position was covered by the ticket surcharge mechanism. If oil spiked and the sold calls were exercised against the airline, the higher ticket surcharges collected from passengers covered the liability. - **Downside Put Protection:** If oil plummeted and the sold puts moved in the money, the airline absorbed financial losses on the put options, but that cash outlay was cushioned by the drastically cheaper physical jet fuel purchased for day-to-day flight operations.
The strategy stripped away market speculation in favor of price mean reversion. As long as Brent traded within an expected price channel—at the time holding near the $100 per barrel mark over a five-month span—the airline collected the option premiums, emerging flat, taking negligible slippage, or booking a clean profit. As Kang emphasizes, corporate "hedging" is often a sanitized misnomer for managing a trade; by systematically identifying the company's natural commercial balance sheet exposures, the treasury constructed an options book that eliminated balance sheet volatility without taking outright directional risk.
- **Option Mechanics:** Short strangle (sold calls above the market, sold puts below the market). - **Core Market Assumption:** Mean reversion within an oil price band around $100/bbl over a five-month window. - **Exposure Offset:** Passenger surcharges protected against rising calls; reduced jet fuel procurement costs protected against falling puts.
`40:00` Corporate Hedging vs. "Trading" and the $130 Million Payoff
David Kang explains that at most non-financial corporations, the word "trading" immediately throws compliance into a fit. Compliance officers and auditors operate under rigid orthodoxy: consumers must buy to lock in purchase prices, while producers must sell to lock in revenues. Any deviation looks like speculative trading rather than legitimate hedging, making internal stakeholders deeply uncomfortable. Yet Kang argues that if a treasurer can find an innovative product that directly tracks the company’s underlying risk—in this case, exposure to jet fuel—they can craft asymmetric hedges that genuinely protect the business. He likens it to someone in the perishable food business discovering a preservation technique that turns a short vegetable exposure into a prolonged long position.
The financial results of Kang's unconventional hedging structure at Qatar Airways were massive. The position made roughly $130 million. In that exact same fiscal year, the airline's passenger revenue side had posted a $65 million loss; without the hedge, Kang notes he might well have lost his job. Instead, the windfall gave the commercial team room to maneuver. Historically, Qatar Airways had been a passive price-follower in the Gulf, trailing the lead of Emirates (EK) and Etihad Airways (EY). Armed with the hedging profits, Kang worked directly with his commercial counterpart, giving him the leeway to seize a first-mover advantage by cutting airfares by 20%. The aggressive pricing caught competitors off guard, packed aircraft to 80% and 90% load factors, and put "bums on seats" to lead the regional market.
- Hedge performance: +$130 million realized gain against an airline passenger revenue shortfall of -$65 million. - Strategic outcome: Enabled a 20% market-leading fare cut, boosting load factors to 80–90% ahead of Emirates and Etihad. - Organizational barrier: Treasury culture and auditors treat any selling of contracts by a consumer as impermissible speculation.
---
`43:26` Hub-and-Spoke Realities and the Woqod Price Gouging
Addressing a common misconception about Gulf carriers, the hosts ask why Middle Eastern airlines need to hedge external fuel prices at all when their home nations control massive crude reserves. Kang points out the fundamental reality of international aviation: airlines run on a hub-and-spoke model. While every flight routes through the Middle East, widebody planes flying ultra-long-haul routes across the globe can only carry so much weight at takeoff and inevitably must refuel at the destination spoke. At foreign outstations, local fuel suppliers command whatever the spot market dictates.
Furthermore, being state-owned did not guarantee Qatar Airways cheap domestic fuel. Dealing with the national oil company, Qatar Petroleum, and its domestic fuel distribution subsidiary, Woqod (Qatar Fuel), was frustratingly difficult. Woqod billed the national airline $3.65 per gallon for jet fuel at Doha. By comparison, when Qatar Airways aircraft landed in Dubai, international suppliers like Chevron were selling jet fuel off the rack for $2.95 per gallon—meaning the home-country petroleum supplier was overcharging the domestic airline by 70 cents a gallon.
```mermaid flowchart LR accTitle: Jet Fuel Price Disparity Between Doha and Dubai accDescr: Diagram illustrating Qatar Airways facing higher domestic fuel costs from Woqod in Doha compared to Chevron in Dubai.
subgraph Doha["Doha (Home Hub)"] QP["Qatar Petroleum / Woqod"] -->|"Charges $3.65 / gallon"| QA1["Qatar Airways Fleet"] end
subgraph Dubai["Dubai (Outstation)"] CHV["Chevron Aviation"] -->|"Charges $2.95 / gallon"| QA2["Qatar Airways Fleet"] end
QA2 -.->|"70¢ per gallon arbitrage"| QA1 ```
---
`45:00` Flying on Fumes: The Secret Dubai Tankering Operation
Confronted with the 70-cent price discrepancy between Doha and Dubai, Qatar Airways turned to fuel tankering using their incoming fleet of brand-new Boeing 787 Dreamliners. Officially, the airline announced that the Dreamliners were flying daily back-and-forth shuttle flights to Dubai solely for crew route-proving and pilot training. In reality, the airline was running a dedicated fuel-arbitrage shuttle.
The pilots dispatched the 787s into Dubai on absolute fumes—carrying as little as 3 to 5 tons of reserves, meaning the plane could not afford even a single holding pattern circle before landing. Once on the ground in Dubai, crews filled the 787’s tanks to maximum capacity, lifting 100 metric tons of fuel at the cheaper $2.95 rate, flew back across the Persian Gulf, and defueled into Qatar Airways' private storage depot at Doha International Airport. The on-airport tanks held between 9 and 10 million gallons, enough to supply the entire airline for a full day of emergency operations if supply ever broke down.
- Boeing 787s flew to Dubai with razor-thin reserves of 3 to 5 tons of fuel, requiring immediate, direct landings. - Each return flight brought back up to 100 tons of cheap Dubai jet fuel to unload in Doha. - Dedicated Doha airport fuel storage held 9 to 10 million gallons, equivalent to roughly one day of full network flight operations.
---
`46:42` Post-2020 Airline Scars and Passing Fuel Costs to Consumers
Assessing the late-2022 market environment where crude and jet fuel crack spreads surged alongside booming post-pandemic passenger travel, Kang observes that airline treasurers have largely retreated from aggressive consumption hedges. Carriers were severely burned during the 2020 collapse: Delta Air Lines posted over $1 billion in hedging losses, while a prominent top-tier Asian flag carrier suffered nearly $2 billion in hedging red ink when air traffic vanished and oil prices went negative.
Because of those catastrophic balance-sheet marks, contemporary treasurers are reluctant to establish forward derivative hedges and are instead relying on ticket pricing and fuel surcharges as their primary risk management tool. Kang notes that his earlier structure was effective precisely because it integrated commercial airfare dynamics directly into treasury execution. When he was scheduled to present the strategy at a major treasury conference in Singapore, the Qatar Airways CEO pulled the plug, refusing to let him reveal their competitive secret. Kang reflects that industry treasurers too often behave "like a horse with blinders," seeing risk management exclusively as the act of buying jet fuel swap contracts rather than leveraging the entire commercial balance sheet.
- Delta dropped over $1 billion on fuel hedges during the 2020 travel collapse. - A premier Asian legacy carrier recorded nearly $2 billion in fuel hedge losses in the same downturn. - Treasury strategies remain constrained by corporate auditors and sovereign wealth fund boards that view short commodity hedges as unacceptable speculation for a consumer.
---
`49:15` Refined Product Bans and Global Diesel Repercussions
Turning to the broader energy crunch and rumors surrounding potential export restrictions on refined products like diesel out of the United States, Kang views protectionist trade barriers with skepticism. Whenever politicians threaten to ban refined energy exports to suppress domestic prices, it evokes erratic political maneuvers. However, the international repercussions of curbing refined flows are severe: major global suppliers like Russia—the second-largest diesel exporter on Earth—and China have already disrupted cross-border distillate balances through quotas and conflict, leaving the international market highly vulnerable to further policy interventions.
`50:00` Distillate Dislocation: PADD 3, the East Coast Squeeze, and Global Flows
A massive volume of diesel has been stripped out of the global refining complex, leaving Europe severely short of product and driving London Gasoil (ICE gasoil) prices through the roof. At the same time, political rhetoric in the United States surrounding potential refined-product export bans created an unusual dislocation. Instead of spiking, domestic diesel and heating oil prices softened as the market priced in trapped supply. The US Gulf Coast—known as PADD 3—serves as the primary "kitchen" of the domestic refining network, producing the bulk of the nation’s refined fuels.
```mermaid flowchart TD accTitle: US Gulf Coast Refined Product Export and Domestic Routing accDescr: Diagram illustrating distillate flows from the US Gulf Coast PADD 3 refineries to New York Harbor, Latin America, Europe, and Asia.
subgraph Gulf["US Gulf Coast (PADD 3)"] Refinery["Refining Complex<br/>('The Kitchen')"] end
subgraph Domestic["US Domestic"] Colonial["Colonial Pipeline / Waterborne"] NYH["New York Harbor (PADD 1)"] end
subgraph International["Export Markets"] LatAm["Latin America (Core Distillate Buyer)"] Europe["Europe / UK (Short Distillates)"] Asia["Asia: Chiba / Tokyo (via Panama Canal)"] end
Refinery --> Colonial Colonial --> NYH Refinery -->|"Primary Flow"| LatAm Refinery -->|"~500k bpd"| Europe Refinery -->|"Aframax / LR2 / Panamax"| Asia Europe -.->|"Supplemental Diesel Imports"| NYH ```
New York Harbor and the broader Atlantic Coast have limited internal pipeline capacity to bring barrels up from the Gulf Coast, functioning largely as a waterborne import market. Consequently, the East Coast regularly imports European diesel to safeguard against regional shortages. This dynamic forces the US East Coast to bid against a starved European market, giving London Gasoil an additional premium while domestic heating oil struggles with regional imbalances. While the majority of Gulf Coast heating oil flows directly to Latin America, roughly 500,000 barrels per day head to Europe—including about 100,000 barrels per day to the UK and 150,000 to the rest of the continent. Simultaneously, long-haul arbitrage trades dispatch product from the US Gulf Coast on Aframax, Long Range 2 (LR2), or Panamax tankers navigating the Panama Canal destined for industrial hubs like Chiba in Tokyo Bay.
- **PADD 3 as "The Kitchen":** The Gulf Coast refinery belt processes the lion's share of crude into distillates, but East Coast infrastructure bottlenecks turn New York Harbor into a competitive seaborne buyer. - **Transatlantic Feedback Loop:** The US East Coast relies on European diesel imports to buffer seasonal demand spikes, inadvertently tightening London Gasoil benchmarks even further. - **Export Arteries:** Beyond the baseline Latin American trade, Gulf distillates move across oceans to fuel European heating grids and Asian industrial facilities. - **Academic Reference:** David Kang’s research paper examining these structural dynamics, *"Fuel Hedging in the 21st Century: What Every Airline Can Learn About Proactively Shaping Revenue,"* is hosted on SSRN.
---
`51:45` The Reality of Corporate Hedging: Silverjet's Miles and Balancing Structural Exposure
Wrapping up the interview, the hosts reflect on the operational absurdities and strategic nuances of managing jet fuel. Tracy Alloway highlights David Kang’s earlier account of Qatar Airways "tankering" cheap fuel in aircraft bellies from Dubai back to Doha as one of the quintessential real-world aviation fuel maneuvers. It triggers her recollection of another legendary airline insolvency story: Silverjet, the defunct all-business-class luxury carrier. When creditors abruptly froze Silverjet’s fuel credit lines as the carrier collapsed, the chief executive famously kept the fleet flying by charging thousands of gallons of aviation fuel directly to his personal credit card. In an ironic twist of frequent-flyer capitalism, the executive's card was linked to British Airways, earning him a windfall of rival BA miles as his own airline sank. Joe Weisenthal points out that bootstrapping high-stakes logistics with personal credit cards is an elite transportation tradition—echoing FedEx founder Fred Smith, who famously gambled company funds in Las Vegas to cover a critical jet fuel bill in the company's early days.
Turning to corporate strategy, Joe notes the lingering stigma around the word "trader" inside corporate treasury departments. Airline executives resist being labeled speculative traders, yet their daily responsibilities require an intimate, directional understanding of markets to execute complex options collars, swaps, and basis trades. The critical distinction is that corporate treasurers are not attempting to maximize hedge-book P&L in a vacuum; their objective is to neutralize the company's existing structural balance sheet exposures. An airline is conventionally assumed to be purely "short oil"—suffering immediate margin degradation when crude prices climb. However, when an airline possesses significant ticket-pricing power and pass-through capacity, it can flip into being structurally "long oil" during rapid price run-ups, rendering a naive, static hedge counterproductive or even financially hazardous.
- **Silverjet’s Credit Arbitrage:** A luxury airline's insolvency fight ended with its founder hoarding rival British Airways frequent flyer miles charged on fuel-card emergency runs. - **FedEx Parallels:** The legendary aviation trope of founders running payroll or jet-A fuel tabs on raw personal credit cards underscores the fragile liquidity realities of operating aircraft. - **Corporate Treasury vs. Speculative Trading:** Treasury teams manage structural, enterprise-wide exposures rather than trading standalone books for absolute alpha. - **The Implicit Long:** If market conditions allow an airline to hike fuel surcharges and ticket yields faster than fuel costs rise, the company's bottom-line performance acts structurally long energy.
---
`54:38` The Bakery Analogy, Fare Elasticity, and the Resilient Travel Boom
Tracy connects the airline fuel surcharge mechanism to an earlier *Odd Lots* episode featuring an independent Chicago bakery. When egg and butter prices surged into headline news, the baker successfully raised retail pastry prices without customer pushback, because the broader public was already primed by news coverage to accept higher food costs. Airlines enjoy a nearly identical psychological umbrella: when crude oil spikes dominate cable news, travelers readily absorb elevated base fares and steep fuel surcharges without cutting back their travel budgets.
```mermaid flowchart LR accTitle: Input Cost Pass-Through Psychology accDescr: Parallel between bakery egg shock pass-through and airline fuel surcharge pass-through under headline inflation.
subgraph Media["Headline News Shock"] OilNews["Crude Oil Spikes"] EggNews["Avian Flu / Egg Spikes"] end
subgraph Consumer["Consumer Expectation"] AcceptAero["Air Travelers Expect Higher Fares"] AcceptBake["Pastry Shoppers Expect Higher Prices"] end
subgraph Firm["Revenue Outcome"] AeroYield["Airline Ticket Yields & Surcharges Expand"] BakeMargin["Bakery Margins Protected"] end
OilNews --> AcceptAero --> AeroYield EggNews --> AcceptBake --> BakeMargin ```
This dynamic demonstrates extraordinary consumer price elasticity—or rather, a dramatic willingness to absorb cost shocks—so long as the inflation is broad and visible. Joe emphasizes that despite relentless complaints about sky-high sticker prices across air travel, actual passenger volume and flight demand have broken records without missing a beat. If the airline sector serves as a real-time proxy for macroeconomic consumer health, the data reveals a running-hot economy where households stubbornly prioritize discretionary experiences and travel over budgetary caution, easily absorbing cost increases that would ordinarily trigger demand destruction.
- **The Chicago Bakery Effect:** Visible input-cost inflation (eggs, crude) gives consumer-facing businesses social cover to push through aggressive price increases that protect or even expand cash margins. - **Headline-Driven Pass-Through:** Consumers rarely push back against airline fuel surcharges when energy geopolitical crises dominate everyday headlines. - **Macro Resilience:** Surging load factors alongside record-high airfares demonstrate that high sticker prices have entirely failed to dent consumer travel behavior.
## Notable quotes > `20:00` it's better to have a hedge on than no hedge at all — David Kang
> `22:04` Sometimes people talk to each other... And they agree on something. And then what they agreed on happens because all of them are looking the same way and are trading the same way. — David Kang
> `24:14` twice as much money while you can — David Kang
> `26:44` Dan, why are we down $360 million?
> `30:00` David, you're the group treasurer. I do not want to see you write any more books on the balance sheet. Do you understand?
> `31:35` stop losing money — Joe Weisenthal
> `31:35` do better — Joe Weisenthal
> `40:00` bums on seats — David Kang
> `46:42` like a horse with blinders — David Kang
## Mentioned Odd Lots, Bloomberg, Tracy Alloway, Joe Weisenthal, David Kang, Qatar Airways, Boeing, Airbus, Southwest Airlines, NatWest, JPMorgan, Sumitomo, Delta Air Lines, Glencore, Mercuria, Vitol, Morgan Stanley, Goldman Sachs, Platts, Argus, ICE, NYMEX, Singapore Airlines, Daniel Ho, Anko van der Werff, Sven Larsen, Emirates, Etihad Airways, Qatar Petroleum, Woqod, Chevron, Boeing 787 Dreamliner, Silverjet, British Airways, FedEx, Fred Smith, SSRN
## Video description <p data-prosemirror-content-type="node" data-prosemirror-node-name="paragraph" data-prosemirror-node-block="true" data-pm-slice="1 1 []">Fuel is a huge expense for airlines, and even on a good day, jet fuel prices are pretty volatile. Throw in two major wars now effecting energy infrastructure, and fuel prices across the board are higher and higher. Airlines have long tried to manage this expense through fuel hedging, using things like swaps and options to hedge against future increases in the price of jet fuel. David Kang, former group treasurer at Qatar Airways, has firsthand experience hedging for a large carrier, and he tells us exactly how it all works. He also explains why airlines use heating oil as a proxy for jet fuel, how much they can make by raising ticket prices and fuel surcharges, and why airlines and oil refineries aren't so different.</p> <p data-prosemirror-content-type="node" data-prosemirror-node-name="paragraph" data-prosemirror-node-block="true">Read more:<br data-prosemirror-content-type="node" data-prosemirror-node-name="hardBreak" data-prosemirror-node-inline="true"><a href="https://www.bloomberg.com/news/articles/2026-09-30/war-exposes-the-cost-of-the-west-s-retreat-from-oil-refining?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article" data-prosemirror-content-type="mark" data-prosemirror-mark-name="link">War Exposes the Cost of the West’s Retreat From Oil Refining</a><br data-prosemirror-content-type="node" data-prosemirror-node-name="hardBreak" data-prosemirror-node-inline="true"><a href="https://www.bloomberg.com/news/articles/2026-09-30/mideast-crude-oil-flows-hit-98-of-pre-war-level-jpmorgan-says?utm_medium=referral&utm_source=podcast&utm_campaign=odd_lots&utm_content=article" data-prosemirror-content-type="mark" data-prosemirror-mark-name="link">JPMorgan and Goldman See Mideast Oil Flows Near Pre-War Levels</a></p> <p data-prosemirror-content-type="node" data-prosemirror-node-name="paragraph" data-prosemirror-node-block="true">Only <a href="http://Bloomberg.com" data-inline-card="" data-card-data="">http://Bloomberg.com</a> subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at <a href="https://www.bloomberg.com/subscriptions/oddlots?in_source=oddlotspodcast" data-prosemirror-content-type="mark" data-prosemirror-mark-name="link">bloomberg.com/subscriptions/oddlots</a></p> <p data-prosemirror-content-type="node" data-prosemirror-node-name="paragraph" data-prosemirror-node-block="true"><a href="http://bloomberg.com/subscriptions/oddlots" data-prosemirror-content-type="mark" data-prosemirror-mark-name="link">Subscribe to the Odd Lots Newsletter</a><br data-prosemirror-content-type="node" data-prosemirror-node-name="hardBreak" data-prosemirror-node-inline="true"><strong data-prosemirror-content-type="mark" data-prosemirror-mark-name="strong">Join the conversation:</strong> <a href="https://discord.gg/oddlots" data-prosemirror-content-type="mark" data-prosemirror-mark-name="link">discord.gg/oddlots</a></p><p>See <a href="https://omnystudio.com/listener">omnystudio.com/listener</a> for privacy information.</p>
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