Jet Fuel Shortages Threaten Summer Flight Schedules

BBC Business reported Sunday that jet fuel shortages are emerging as a serious threat to summer travel, as a prolonged closure of the Strait of Hormuz drives prices to punishing levels and forces airlines to rethink their schedules.

Prices More Than Double on Supply Shock

The Strait of Hormuz has been blocked for roughly eight weeks. The Gulf region ordinarily supplies around one-fifth of all jet fuel traded globally each day. With those exports cut off, European buyers have scrambled for supplies elsewhere. The price of jet fuel in Europe was approximately $831 per tonne in late February. By early April it had surged past $1,800, a rise of more than 120%. Prices have since eased slightly but remain above $1,500 per tonne.

The spike is far steeper than the move in crude oil itself. That gap reflects a structural bottleneck in refining. Jet fuel requires specialist processing, and available refinery capacity determines supply almost as much as raw crude does.

Europe’s Refining Gap Leaves UK Most Exposed

Europe imports more than half its jet fuel from the Gulf under normal conditions, owing to limited domestic refining. The UK faces particular vulnerability. Imports account for roughly 65% of domestic jet fuel supply, and five European refineries have closed over the past two-and-a-half years. Only four remain operational in the UK.

Amaar Khan, head of jet fuel pricing at Argus Media, told the BBC that weaker refinery supply is colliding with steadily rising demand, a combination that leaves little buffer when a major export route shuts.

Airlines Hedge Some Risk But Feel the Burn

Fuel typically represents 25 to 30% of airline operating costs, according to the International Air Transport Association. Many European and Asian carriers hedge future purchases to cap exposure. EasyJet locked in 80% of first-half fuel needs at $717 per tonne. Even so, sourcing the remainder at spot prices cost the carrier roughly £25 million in March alone.

US airlines that chose not to hedge are more severely exposed. Several carriers have already responded by trimming capacity. Lufthansa announced plans to remove 20,000 flights through the end of October. Air France KLM, Air Canada and SAS have also cut summer schedules.

What Travelers Can Expect This Summer

Fares are rising, most sharply on long-haul routes where Gulf carriers have reduced capacity significantly. Routes that were marginally profitable before the crisis are now loss-making, according to Jonathan Hinkles, CEO of Skybus and former chief of regional carrier Loganair. Unless the Strait reopens or alternative supply chains scale quickly, further cancellations and higher ticket prices remain likely through the peak summer period.

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