The head of the International Energy Agency, Fatih Birol, has warned that Europe has “maybe six weeks” of jet fuel left, the BBC reports.
If Europe fails to replace at least half of its imports from the Middle East, stocks will fall to a critical point by June. The Strait of Hormuz, through which almost all oil from the Persian Gulf passes, has been closed for more than six weeks, and oil prices have risen sharply, raising concerns about a possible shortage. Birol told the AP that flight cancellations could soon begin. The IEA said in its monthly report that exports from the Persian Gulf region are the main source of jet fuel on the international market. Oil refineries in major exporting countries such as Korea, India and China are also heavily dependent on Middle Eastern crude.
The report said the crisis “has thrown a proverbial wrench into the inner workings of the aviation fuel markets.” A British government spokesman told the BBC that the UK was working with fuel suppliers and airlines to ensure people could continue to travel and businesses were supported. British airlines said there were no immediate supply disruptions. However, airlines were in talks with the government about key measures to be taken if there were to be a shortage of jet fuel.
The IEA noted that Europe previously got about 75% of its jet fuel from the Middle East. European countries are now looking to other sources to ensure imports. Analysts have said the fuel is being imported from the US and Nigeria. The IEA said there had been a significant increase in US imports in recent weeks. However, even these supplies could only replace half of the lost cargo.
Looking at various scenarios, the IEA has indicated that if Europe is unable to replace at least half of Middle Eastern imports,
there could be a shortage of jet fuel at some airports, which would mean flight cancellations
and the destruction of demand. Jet fuel could also start to run short even if three-quarters of supplies are replaced, but that would be later – in August. Therefore, it now looks like Europe will have to work harder to attract substitutes from elsewhere to maintain sufficient fuel supplies during the summer months.
Amar Khan, head of European jet fuel pricing at Argus Media, believes that even if supplies from the Persian Gulf countries resume in the near future, there could be a shortage of fuel during the summer season. This is not known for sure, but it is increasingly looking like there could be some shortages in some parts of Europe.
Many airlines around the world have already introduced emergency measures to combat rising fuel prices, which typically account for 20-40% of operating costs. In Europe, the price of jet fuel reached 1,838 dollars per tonne in April, compared to 831 dollars per tonne before the war. Earlier this week, the European Commission said there was no shortage of jet fuel, but acknowledged that there could be problems in the near future. The EC said that the oil and gas coordination groups meet weekly and that the Commission president could announce new measures next week.
Industry representatives have called on the EU to clearly define rules for passenger compensation to ensure that fuel shortages or flight cancellations caused by the conflict in the Middle East are considered extraordinary circumstances. This means that airlines do not have to pay out large compensation payments in cases of flight cancellations.
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