What happened
Europe faces a severe aviation fuel shortage caused by Iran’s closure of the Strait of Hormuz, which has cut off 30 to 50% of the continent’s jet fuel supply. Jet fuel prices surged to $1,700-$1,900 per metric ton, more than doubling from late February.
The last tanker of jet fuel from the Middle East, the Rong Lin Wan, is expected to arrive in Rotterdam on 9 April. After that, no further Middle East supply is expected.
Why it matters: Imports fell to 420,000 barrels per day, 40% below the prior week and the lowest since March 2022. Airlines had planned a 5.4% capacity increase for April. This has been slashed to 0.2%.
Airline impact
SAS cancelled approximately 1,000 flights in April. CEO Anko van der Werff confirmed “the price of jet fuel has doubled in ten days.”
Ryanair CEO Michael O’Leary warned 10 to 25% of supplies could be at risk in May and June. The airline may cancel 5 to 10% of flights. Lufthansa Group is preparing to ground up to 20 aircraft initially. Air France-KLM introduced long-haul fuel surcharges.
Ticket prices are rising 15 to 20% across European carriers.
Vulnerability
The UK is most immediately exposed, having sourced roughly 50% of its jet fuel from the Middle East. London Heathrow was identified as particularly vulnerable. Portugal has four months of reserves. Poland is self-sufficient.
Eurocontrol estimates 1,150 flights daily could be impacted by summer reroutings.
What happens next
Airlines have four to six weeks of fuel visibility. If the Iran conflict does not end by the end of April, massive summer cancellations are expected. Airlines are scrambling to source from West Africa and the US Gulf Coast. European governments have not yet invoked emergency fuel-sharing mechanisms.