Europe faces fuel crunch

Europe could start running short of jet fuel within weeks, putting summer flight schedules at risk across the continent. (cnbc.com) The warning sharpened on April 16, when the International Energy Agency told CNBC that several European countries could face shortages in the next six weeks. The agency said the Middle East had supplied 75% of Europe’s net jet-fuel imports before the current disruption. (cnbc.com) The immediate choke point is the Strait of Hormuz, the shipping lane between the Persian Gulf and the open ocean. CNBC reported that roughly 25% to 30% of global jet fuel and a fifth of global oil supply move through that corridor. (cnbc.com) Airport operators said the timetable may be even tighter. ACI Europe warned in a letter reported by CNBC on April 10 that a “systemic” shortage could hit European airports within three weeks if passage through Hormuz does not resume in a stable way. (cnbc.com) Airlines have already started cutting back. Cirium data cited by Business Insider showed 19 of the world’s 20 largest airlines had reduced May capacity, and planned global capacity for May had fallen three percentage points since early March. (businessinsider.com) Some carriers moved earlier than that data showed. Reuters reported on March 17 that Scandinavian airline SAS would cancel 1,000 flights in April after jet-fuel prices surged with the Iran war and the Strait of Hormuz disruption. (marketscreener.com) Jet fuel is refined from crude oil, and it is usually one of an airline’s biggest costs. Euronews, citing the International Air Transport Association, reported that fuel accounts for about 30% of airline expenses and that jet-fuel prices had roughly doubled since the war began. (euronews.com) Even after a pullback last week, the global average refinery jet-fuel price was still $184.63 a barrel, according to the International Air Transport Association’s latest monitor. That level helps explain why airlines are trimming weaker routes first and raising fares or surcharges where they can. (iata.org) European governments are now discussing emergency fixes instead of treating this as a normal price spike. Reuters reported on April 20 that Spain said it would join a potential European Union plan to share jet-fuel stocks and consider joint purchases. (msn.com) The timing is especially sensitive because Europe is heading into its busiest flying season. ACI Europe says air connectivity supports 851 billion euros in gross domestic product and 14 million jobs across European economies, which leaves little room for a fuel squeeze to stay contained to airports. (cnbc.com)