Europe braces for jet‑fuel crisis
- International Energy Agency chief Fatih Birol warned on April 16 that Europe had “maybe six weeks or so” of jet fuel left if Strait of Hormuz disruptions persisted, raising the risk of flight cancellations. - By April 23, Lufthansa and Scandinavian Airlines had begun trimming schedules; CNBC reported August jet-fuel demand runs about 40% above March, while IATA’s latest weekly global jet-fuel price stood at $184.63 a barrel. - The squeeze hits before Europe’s summer peak, with air connectivity supporting €851 billion in gross domestic product and 14 million jobs across the region. (cnbc.com)
Europe’s summer flight network is under pressure after the International Energy Agency warned the continent could run short of jet fuel within weeks. (ap.org) International Energy Agency Executive Director Fatih Birol told The Associated Press on April 16 that Europe had “maybe six weeks or so” of jet fuel left if supplies stayed blocked by the Iran war and the Strait of Hormuz disruption. (ap.org) Birol said Europe normally gets about 75% of its jet fuel from Middle East refineries, and told CNBC on April 23 that production there is now “almost zero.” He said Europe is trying to replace that fuel with imports from the United States and Nigeria. (cnbc.com) The timing is difficult because August jet-fuel demand in Europe is typically about 40% higher than in March. CNBC also reported that air connectivity contributes €851 billion to European gross domestic product and supports 14 million jobs. (cnbc.com) Airlines have already started cutting back. CNBC said Lufthansa and Scandinavian Airlines had reduced flights, and NPR reported that European carriers were slashing thousands of services through the summer season as fuel costs surged. (cnbc.com) (nprillinois.org) Fuel prices remain far above pre-crisis levels even after easing from their peak. IATA’s Jet Fuel Price Monitor said the global average jet-fuel price fell 6.7% week over week to $184.63 a barrel in the latest reading. (iata.org) That still leaves airlines exposed because fuel can account for 20% to 40% of revenue, according to Bernstein analyst Alex Irving in comments reported by CNBC. He said higher jet-fuel prices can push an industry with single-digit margins into losses. (cnbc.com) The geopolitical backdrop tightened again on April 25, when French President Emmanuel Macron and Greek Prime Minister Kyriakos Mitsotakis signed nine bilateral deals in Athens, including an extension of their defense pact. Macron said the partnership includes mutual support in case of armed aggression. (politico.eu) For travelers, the immediate effect is fewer seats and higher fares on European routes if replacement fuel cargoes do not arrive quickly. For airlines and regulators, the next few weeks will decide whether the warning stays theoretical or turns into a summer schedule problem. (cnbc.com) (ap.org)
