Jet fuel supply risk

Airlines are drawing up backup fuel plans as the war involving Iran squeezes jet fuel flows just weeks before the Northern Hemisphere summer rush. (cnbc.com) The pressure point is the Strait of Hormuz, the narrow shipping lane at the mouth of the Gulf. The International Energy Agency said around 20 million barrels a day of crude and oil products normally pass through it, and traffic has fallen to a trickle since the war that began on February 28. (iea.org 1) (iea.org 2) Jet fuel is getting hit harder than crude alone because Gulf refineries are major exporters of the fuels planes actually burn. The International Energy Agency said Gulf producers exported 3.3 million barrels a day of refined oil products in 2025, including diesel and jet fuel, and more than 3 million barrels a day of refining capacity in the region has already shut. (iea.org) Analysts told CNBC that Europe could face a “systemic” jet fuel shortage within three to four weeks if flows do not resume, with severe flight cuts possible in May and June. ACI Europe, the airport trade group, said last week shortages could hit within three weeks. (cnbc.com) The timing is rough for airlines because demand is still rising. The International Air Transport Association said January 2026 passenger demand was up 3.8% from a year earlier, while global seat capacity by March was running 5.2% above a year earlier. (iata.org) That leaves carriers trying to serve a bigger summer schedule with a fuel market that can tighten fast. Airports Council International World said global passenger traffic is forecast to reach 10.2 billion in 2026, up 3.9% from 2025, even as airports and airlines already face capacity constraints. (aci.aero) Fuel is usually an airline’s biggest cost after labor, so a supply shock moves quickly from refinery gates to ticket prices and route maps. IATA said jet fuel was expected to account for 25.8% of airline operating costs in 2025, and CNBC reported U.S. jet fuel prices nearly doubled from $2.50 a gallon on February 27 to $4.88 on April 2. (iata.org) (cnbc.com) Airlines are already adjusting. CNBC reported Lufthansa has assigned teams to contingency planning for weaker demand or a lack of jet fuel, and United Airlines Chief Executive Scott Kirby said the carrier may need to cut some Asia flying if shortages persist. (cnbc.com) The risk is uneven across regions. CNBC said Europe and parts of Asia are more exposed than the United States because they rely more heavily on imported jet fuel, though U.S. carriers can still run into shortages on international routes because aircraft must fuel where they operate. (cnbc.com 1) (cnbc.com 2) Governments are already moving to cushion the wider energy shock. The International Energy Agency said its member countries agreed on March 11 to release 400 million barrels of emergency oil stocks, but it also said restoring transit through Hormuz remains essential to stabilize diesel, jet fuel and other product markets. (iea.org) If shipping through Hormuz stays constrained into late April and May, the summer travel season could open with fewer flights, higher fares and more last-minute schedule changes. If flows resume sooner, airlines may avoid the deeper cuts now being sketched out in contingency plans. (cnbc.com)