Europe Faces Jet Fuel Shortage Risk Amid Hormuz Strait Tensions and Supply Disruptions

Following the official end of the fragile ceasefire between the US and Iran and ongoing clashes over control of the strategic Strait of Hormuz, Europe is confronting a far greater risk of jet fuel shortages than initially anticipated. Prior to the conflict escalation in late February, Europe and the UK heavily relied on jet fuel shipments from the Middle East, mainly Kuwait and the United Arab Emirates, transported via the crucial maritime route through the Strait of Hormuz. Early in the crisis, immediate supply disruptions were avoided as many tankers had already passed through the strait en route to Europe. However, European countries subsequently sought alternative fuel sources from the US and Canada to mitigate risks.

The aviation industry initially faced soaring fuel prices rather than physical shortages, especially impacting airlines that had not hedged fuel costs. The ceasefire agreement reached last month between US President Donald Trump and Tehran temporarily eased tensions, raising hopes for reopening the strait and resuming normal fuel shipments. This development also reduced fears of mass flight cancellations during the summer travel season, encouraging airlines to maintain bookings.

Despite this, recent reports indicate Europe now has only about a one-month supply of jet fuel remaining. Research firm Energy Aspects warns that Europe could face a deficit of approximately 600,000 barrels per day in the third quarter. The situation is particularly sensitive due to the closure of several local refineries in Europe and the UK in recent years, increasing dependence on Middle Eastern imports.

Currently, flights continue without major disruptions, supported by alternative supplies from Canada, India, Nigeria, and the US. However, the end of the summer season may test the market as airlines plan to increase flight schedules to meet seasonal demand. Industry experts note that while similar warnings have been issued before without causing significant flight interruptions, the primary concern now is the persistently high jet fuel prices. Some airlines, including Delta Air Lines, have indicated that even if fuel prices fall, ticket prices may not decrease immediately.