The strong demand from the West has fully drawn down surplus jet fuel stored on ships around Singapore, while refiners' margins for the aviation fuel - a big drag on overall profits during the COVID-19 pandemic - have nearly trebled since end-March.

Asia exported about 417,000 barrels per day (bpd) of jet fuel to Europe and North America combined in April-May, nearly 32% higher than 316,000 bpd for February-March period, according to Reuters calculations based on data from oil analytics firm Vortexa.

Jet fuel volumes in floating storage facilities have consistently stayed at zero for the past four weeks for the first time since March last year, according to data intelligence firm Kpler.

There were about 313,000 barrels of jet fuel stored in ships in early May, already 90% lower compared with the same time last year, Kpler data showed.

At least 10 vessels, chartered by companies including Saudi's Aramco Trading, Royal Dutch Shell, Chevron Corp and Valero are currently in transit from South Korea to the United States, ship tracking data showed, carrying about 3.3 million barrels of jet fuel for delivery this month.

"A pick-up in air travel in the U.S. and Europe amid falling (coronavirus) infection rates and possible relaxing of travel restrictions this summer, that contrasts against the weak fundamentals in Asia, is expected to support a widening of East-West jet fuel arbitrage in the near term," said Serena Huang, Asia lead analyst at Vortexa.

But the strength of the East-West arbitrage is also dependent on the inventory levels in the United States and Europe, which suggests the Asia-U.S. arbitrage would be stronger in the near term than the Asia-Europe arbitrage, analysts said.

"U.S. jet stockpiles in May are on par with 2019 pre-pandemic average levels as per Energy Information Administration data, but Amsterdam-Rotterdam-Antwerp's (ARA) jet stockpiles are still above pre-pandemic levels," analyst Huang said.

However, volumes to Europe are expected to gradually increase as further re-opening of European markets for travel in coming days is expected to stimulate demand.

"I think there is scope for that jet arbitrage volume to increase as Europe starts to open up and passengers begin to fly again," said Kevin Wright, Kpler's lead analyst for Asia Pacific.

Aviation demand outlook in Asia remains bleak as most countries continue to the battle new waves of the pandemic. Some analysts believe it might take well into 2022 for the region, except China, to witness any substantial recovery.

(Reporting by Koustav Samanta; Editing by Florence Tan and Kenneth Maxwell)

By Koustav Samanta