As the Iran war drags on, Europe's airline industry is on high alert. Signals are emerging that jet fuel supplies could be cut off soon, but there are no good substitutes.
On the 16th, according to the New York Times (NYT), Ryanair, a leading European low-cost carrier (LCC), said this week that its counterparties can guarantee sufficient jet fuel supplies only through most of May, and that if tankers are unable to pass through the Strait of Hormuz soon, fuel shortages could become a reality.
Ryanair said in a statement, "If the Iran war ends soon, there will be no supply disruptions," but added, "If the closure of the Strait of Hormuz continues into May or June, we cannot rule out fuel supply risks at some European airports."
Earlier, on the 14th, Spokesperson Anna-Kaisa Itkonen of the European Commission said, "There is currently no evidence within the EU to prove a fuel shortage," but added, "In particular, there could be supply issues in the near term related to jet fuel." On the 9th, Airports Council International Europe (ACI Europe) also sent a letter to the European Commission, warning that if tankers fail to resume passage through the Strait of Hormuz, a jet fuel shortage could begin as early as early May.
In recent decades, Europe has seen continued closures of domestic refineries, sharply increasing its dependence on imported aviation fuel. In the United Kingdom, which consumes the most jet fuel in Europe, the number of refineries fell from 18 in the 1970s to four today. As a result, Europe is the largest consumer of jet fuel transported through the Strait of Hormuz, and supplies via the strait account for about 41% of total imported aviation fuel.
According to oil analysts, European airlines have relied in recent weeks on volumes that departed before the war, but now most jet fuel supplies through the Strait of Hormuz have declined. Since the Iran war broke out and the strait was effectively sealed, aviation fuel prices have also surged. As of the 14th, global jet fuel prices were about 80% higher than before the war, the NYT said.
Accordingly, airlines worldwide are raising ticket prices and cutting flights on less profitable routes. KLM Royal Dutch Airlines said it will cancel 80 flights to and from Amsterdam Schiphol Airport starting in May due to the burden of soaring aviation fuel expenses.
In particular, with peak summer travel season approaching and demand for aviation fuel rising, the shortage could worsen. EasyJet, Europe's second-largest airline, said it has secured about 70% of the fuel it needs through the summer, but the remaining volumes face high price volatility.
Fatih Birol, executive director of the International Energy Agency (IEA), said in an interview with The Associated Press that "Europe may have, at most, about six weeks' worth of aviation fuel," adding, "This situation could be the biggest energy crisis we have experienced." The IEA projected that if Europe fails to replace more than half of the jet fuel it had been sourcing from the Middle East, supply shortages could begin as early as June.
Abhishek Kumar, a Dubai-based oil analyst, said many European airlines have fixed fuel prices through long-term contracts and flight reductions have been relatively limited, but "if this situation persists for 2–3 more weeks, everyone will feel the impact of the war."