Originally Posted by Bucking Bar

You have to understand how energy is bought and sold. Think of it like bringing your own wine to a restaurant and paying a corkage fee. But, your bottle chills in a cellar with 1,000 more bottles of the same vintage. When the Waiter pours your glass, you don't know or care where it came from. But, you know you are getting Jet A, same as you put in.

Oil from this refinery might be put in any jet, refilling a supply in say, Kennedy. Those barrels might actually be replenished in say, LAX. It is easier to transport on paper to where the actual supply is than send the oil to the point of sale.

Energy contracts are commodities contracts. Delta's just getting it's hands on a competitor that it can use to hedge its own crack spread and / or profit by selling refined Jet A. Since hedges don't use real Jet A, this actually has a more linear relationship to Delta's real cash flow.

What I find interesting that it is an example of vertical integration in a Company that's mostly managed the last decade by outsourcing its core operation.