Once the demand star among oil products, the coronavirus has pushed jet fuel to the bottom of the barrel in the near term at least.

As travel plans are put on hold and flights are cut, profits from producing the fuel are plummeting. Margins for the fuel at Singapore refineries have tumbled 44% since Jan. 23 when markets first began taking notice of the virus. They lurched 13% lower over Monday and Tuesday on signs the outbreak is going global.

The current downturn is in contrast with the U.S. Energy Information Administration’s long-term outlook, which projects a steady rise in demand through 2050. Rising affluence, particularly in Asia, is expected to boost air travel and result in jet fuel outshining other transport and industrial fuels.

As flight cancellations mount, Asian traders and refiners have been sending jet fuel across the Pacific to California and also to Europe. Shipments of aviation fuel from Asia to the Americas are poised to reach a five-month high in February, contributing to a global glut.

The International Air Transport Association forecast last week that global passenger demand would contract by 0.6% this year, which would be the first annual decline since the global financial crisis in 2008 and 2009. That projection, which assumed losses would be limited to markets linked to China, may now be too conservative given the recent spread of the virus.

In the U.S., airline stocks posted the biggest two-day drop in more than three years as the Centers for Disease Control and Prevention warned Americans to brace for a domestic outbreak of the virus that would cause significant disruptions to daily life.

Flight Cancellations

So far the capacity cuts and announcements from airlines have focused on China and Hong Kong, but it’s inevitable they will spread elsewhere, according to Brendan Sobie, an analyst and consultant at Sobie Aviation in Singapore.

“We’re looking at a dismal March and June quarter for airlines and the hope is the market will recover in the second half, but this can’t be guaranteed,” he said. However, “the jet fuel price declines will help offset some of the losses for those airlines not hedging,” Sobie said.

Normally, when jet fuel prices fall to a discount to diesel, refiners are able to tweak product yields to produce more of the industrial fuel. But with diesel also facing a glut, that’s not really an option this time round. Even prices for very-low sulfur fuel oil, in demand due to the IMO 2020 shipping standards, have been hit by the coronavirus, leaving refiners little room for optimism.

When respite will come for fuel processors is hard to predict, said Peter Lee, a senior oil and gas analyst at Fitch Solutions. It’s “challenging” to assess when the outbreak will peak, although with jet fuel prices so low there could be some uptick in demand, he said.