A stark warning has emerged from the head of the International Energy Agency (IEA): Europe may only have six weeks of jet fuel reserves remaining if disruptions to Middle Eastern fuel supplies persist. For over six weeks, the Strait of Hormuz, the world’s most critical chokepoint for Gulf region jet fuel exports, has been effectively closed by Iran, a move taken in response to recent attacks from the U.S. and Israel. The closure has sent global jet fuel prices skyrocketing and ignited widespread fears of crippling supply shortages across Europe.
In its latest monthly oil market report published this week, the IEA, which advises 32 member nations on energy security and supply strategy, outlined the fragile state of global aviation fuel networks. The organization notes that Gulf region exports represent the single largest source of jet fuel for the global market, and even major refining hubs in exporting countries including South Korea, India and China rely heavily on crude oil imports from the same Middle Eastern region. This interconnected dependency means the ongoing closure has severely disrupted the fundamental operations of international jet fuel markets, the report says.
Historically, Europe has sourced roughly 75% of its total jet fuel imports from the Middle East, leaving the continent uniquely vulnerable to the current supply shock. In response, European nations have launched urgent efforts to source replacement supplies from alternative export markets, with the IA confirming that U.S. jet fuel exports to the region have ramped up dramatically in recent weeks. Even if every available U.S. shipment were redirected to Europe, however, the increased exports would only replace slightly more than half of the lost Middle Eastern supplies, the agency warns.
The IEA’s scenario analysis paints a grim timeline for potential shortages. If Europe fails to replace more than 50% of its missing Middle Eastern imports, physical stock shortages will hit select airports as early as June, leading to immediate flight cancellations and reduced consumer demand for air travel. Even if the continent manages to replace three-quarters of the lost supplies, shortages and cancellations will still occur, just pushed back to August. To maintain sufficient inventory levels through the peak summer travel season, European energy markets must ramp up efforts to attract additional replacement cargoes from non-Middle Eastern sources, the report concludes.
The price shock from the supply disruption has already forced airlines across the globe to implement emergency cost-mitigation measures, as jet fuel typically accounts for 20% to 40% of a commercial airline’s total operating costs. At the start of April, the benchmark European jet fuel price hit an all-time record of $1,838 per tonne — more than double the $831 per tonne price recorded before the outbreak of the current conflict.
European Union officials have attempted to downplay immediate risks, stating earlier this week that there is currently no evidence of widespread jet fuel shortages across the bloc, while acknowledging that supply issues could emerge in the near future. A European Commission spokesperson told reporters that crude oil supplies to EU refineries remain stable for now, with no immediate need to release additional strategic fuel reserves. The Commission’s oil and gas coordination groups are now meeting weekly to address the crisis, and a full package of emergency energy measures is set to be announced by the Commission president next week.
The warning from the IEA aligns with earlier concerns raised by Europe’s airport industry. Last week, Airports Council International, the leading trade body for European aviation hubs, sent an open letter to the European Commission warning that widespread jet fuel shortages would hit the continent if the Strait of Hormuz remains closed for more than three more weeks. Budget airline EasyJet became one of the first major carriers to publicly disclose the financial impact of the crisis in a trading update released Thursday, reporting an extra £25 million in unexpected fuel costs during March alone. This impact came even though the airline had already hedged more than 75% of its jet fuel needs at fixed prices before the conflict drove up costs. The company noted that the ongoing conflict has created significant short-term uncertainty around both fuel prices and consumer travel demand.