Strait of Hormuz squeezes summer fares

Europe’s summer flight market is tightening because Europe’s April imports of jet fuel loaded in the Middle East are set to dry up. (msn.com) Reuters reported on Tuesday, April 28, that the Iran war has disrupted Middle East supplies enough that Europe’s April jet-fuel imports from the region are expected to vanish. The Strait of Hormuz normally carries a huge share of global oil and refined products. (msn.com) (cnbc.com) Fatih Birol, executive director of the International Energy Agency, said Europe has “maybe six weeks” of jet-fuel supplies left. He told CNBC that August jet-fuel demand is usually about 40% higher than March demand. (pbs.org) (cnbc.com) Europe is more exposed than the United States because it imports more aviation fuel. Birol said Middle East refineries normally provide around 75% of Europe’s jet fuel, and output from those facilities is now “almost zero.” (cnbc.com) Jet fuel is usually one of an airline’s biggest costs, accounting for about 30% of total expenses, according to the International Air Transport Association. The same industry group said jet-fuel prices were up 103% at the end of March from a month earlier. (pbs.org) (cnbc.com) Airlines have already started adjusting. CNBC reported Lufthansa and SAS are reducing flights, while Reuters said the European Union is prepared to coordinate a release of jet-fuel stocks if the disruption persists. (cnbc.com) (msn.com) The pressure is showing up in ticket prices and fees. Yahoo Travel reported that SAS, Qantas, and Air France have announced fuel surcharges or fare increases that are being passed on to travelers. (travel.yahoo.com) Some U.S. carriers are exposed on long-haul routes even if the United States produces more jet fuel than Europe. United Airlines chief executive Scott Kirby said late in March that the carrier would have to cut back flights to Asia if fuel pressure persisted. (cnbc.com) Travel advice has shifted with the fuel market. Clint Henderson of The Points Guy told Yahoo Travel that his team is “throwing the usual playbook out the window” and advising people to book flights earlier because last-minute deals are becoming less likely. (travel.yahoo.com) Europe is now trying to pull in replacement fuel from the United States and Nigeria while peak-season demand gets closer. If those barrels do not arrive fast enough, this summer’s squeeze moves from expensive tickets to fewer seats. (cnbc.com)