Strait of Hormuz Blockade Threatens European Summer Flights as Jet Fuel Prices Soar

European airlines and travellers are confronting a turbulent summer as the ongoing blockade of the Strait of Hormuz continues to restrict critical jet fuel supplies, sending prices spiralling and raising the spectre of widespread flight disruptions.

Since the onset of hostilities in the Middle East, the cost of jet fuel has surged dramatically. In late February, before the initial US and Israeli airstrikes, European jet fuel traded at $831 per tonne; by early April, it had reached $1838, an increase exceeding 120%. Although prices have since moderated, they consistently remain above $1500.

Europe, the continent's largest consumer of jet fuel, is particularly vulnerable, relying on imports for over half its supply, traditionally sourced from the Gulf. With the Strait of Hormuz closed for eight weeks, these vital shipments are unavailable, forcing a costly scramble for alternative sources and exposing the fragility of the supply chain.

Airlines Cut Capacity and Raise Fares Amidst Soaring Costs

Fuel constitutes 25-30% of airline operating costs. Consequently, carriers are now either absorbing significant losses or passing them directly to passengers. Airlines like Air France KLM and Lufthansa have already trimmed their summer schedules, with Lufthansa cancelling 20,000 flights through October. Long-haul fares, especially those typically served by Gulf carriers, have seen the most pronounced increases. Research by Teneo indicates a flight from London to Melbourne in June is 76% more expensive than last year.

United Airlines CEO Scott Kirby explicitly stated the company would do 'whatever it takes to recover 100% of the increase in jet fuel prices'. IAG, parent company of British Airways, issued similar warnings, while Virgin Atlantic has introduced surcharges of up to £360 on business class fares.

Impending Shortages Feared as Europe’s Reserves Dwindle

Beyond price, the more pressing concern is the looming physical shortage of fuel. The International Energy Agency (IEA) warned in mid-April that Europe possessed 'maybe six weeks of jet fuel left', forecasting critical reserve levels by June if current trends persist. This scenario could lead to 'physical shortages at select airports, resulting in flight cancellations and demand destruction'.

Despite increased imports from the US, these only replace approximately half of the lost Middle Eastern supplies. East Asian refineries, another source, face reduced output due to their own reliance on Middle Eastern crude. Furthermore, the EU's import ban on refined products from Russian crude has eliminated India as a significant supplier. Consequently, stocks at the key Amsterdam-Rotterdam-Antwerp hub are at a six-year low, with Europe's overall supply dropping from 37 to an estimated 30 days. The IEA considers 23 days the critical threshold for potential airport fuel depletion.

Industry figures like Amaar Khan of Argus Media underscore the 'huge risk' of shortages, predicting that larger demand hubs will likely be prioritised over smaller airports. Wizz Air CEO József Váradi anticipates a 'mess' rather than uniform impact, with cancellations becoming inevitable if no alternative supplies emerge.

Government Measures Address Symptoms, Not Root Causes

In response, both the UK government and the European Commission are implementing measures to mitigate the crisis. The UK is considering allowing airlines to cancel flights without penalty to preserve valuable take-off and landing slots, and is exploring the viability of importing Jet A fuel from the US. Brussels has already classified jet fuel shortages as 'exceptional circumstances', exempting airlines from passenger compensation, and is likely to ease restrictions on 'tankering' – carrying excess fuel to avoid higher prices at destination airports.

However, these interventions address the symptoms rather than the underlying structural issue of Europe's dependency on imports. With only four refineries remaining in the UK, down from eighteen in the 1970s, calls for greater domestic refining resilience are emerging. Boosting Sustainable Aviation Fuel (SAF) production is a long-term aspiration, but current output is low, largely sourced from East Asia, and prohibitively expensive. Until significant investment materialises, Europe's aviation sector remains critically exposed to geopolitical instability and resource extraction dynamics in the Middle East.