European Airports Face "Systemic" Jet Fuel Shortage Threat Within Three Weeks

Escalating Concerns Over European Jet Fuel Supply

The European aviation industry is sounding a grave alarm regarding an impending jet fuel shortage, with Airports Council International (ACI Europe) signaling that airports across the continent could face a "systemic" deficit within the next three weeks. This warning comes amidst escalating geopolitical tensions that are disrupting vital supply chains, casting a long shadow over the air travel sector, which serves as a critical lifeline for numerous European economies.

The Strait of Hormuz's Impact on Global Supply

The Strait of Hormuz, a strategically vital waterway through which a substantial portion of global oil supply transits, lies at the heart of these concerns. Military developments in the region have led to disruptions in navigation, directly affecting the flow of fuel into Europe. ACI Europe, in a detailed letter seen by the Financial Times, has alerted European Commissioner for Transport, Apostolos Sirtas, stating: "The growing concern within the airport industry regarding jet fuel availability necessitates forward-looking monitoring and action by the EU.".

The letter further elaborates, "Should shipping through the Strait of Hormuz not resume in a material and stable manner within the next three weeks, a systemic shortage of jet fuel in the EU will become a reality." The report adds that this concern is amplified as the peak summer tourism season approaches, a period when "the entire tourism ecosystem, upon which many EU economies depend, is underpinned by air travel.".

Soaring Prices and Imposed Restrictions

Despite US President Donald Trump's announcement of a two-week ceasefire in the Iran conflict, global oil prices have remained elevated. According to data from price reporting agency Argus, the benchmark Northwest Europe jet fuel price closed at $1,573 per tonne on Thursday, a significant increase from approximately $750 per tonne before the recent escalations. This price surge has prompted some Asian countries, such as Vietnam, to implement rationing measures for jet fuel. While Europe has not yet experienced widespread shortages, jet fuel prices have doubled, and several airlines have issued warnings about flight cancellations.

European airlines maintain that their jet fuel reserves should suffice for a few more weeks, but suppliers are unable to guarantee deliveries for May. Italy, last weekend, saw restrictions imposed on jet fuel at four of its major airports due to operational issues with a key supplier. Although this incident was not directly linked to the Strait of Hormuz, the significance of this strategic chokepoint, through which approximately 40% of global jet fuel supply passes, cannot be understated.

Calls for EU Intervention

In this context, ACI Europe has urged the EU to conduct comprehensive monitoring of the supply situation, to aid the industry in coordinating response measures. The council elaborated: "There is currently no comprehensive assessment or monitoring of jet fuel production and stock levels at the EU level. A sudden contraction in supply would severely disrupt airport operations and air networks, and a systemic jet fuel shortage, if it occurs, would have dire economic repercussions for affected communities and for Europe as a whole.".

Major airlines have already begun curtailing services, with some routes becoming unprofitable due to the escalating cost of jet fuel. Delta Air Lines announced this week a 3.5% capacity reduction, including some mid-week and late-night flights, to offset the impact of higher fuel prices. The company anticipates an additional $2 billion in fuel costs between April and June. Air New Zealand has also canceled some flights due to soaring fuel costs, while LOT Polish Airlines is scaling back less popular routes and anticipates increasing ticket prices.