A sharp rise in jet fuel prices and the risk of physical shortages threaten to make this summer a difficult one for airlines and holidaymakers. The disruption follows the closure of the Strait of Hormuz at the start of the Middle East conflict, which has cut off a major source of jet kerosene and pushed spot prices sharply higher.
Why prices jumped
Around 20% of globally traded jet fuel normally comes from Gulf exporters, and Europe is a major buyer because its refining capacity is limited. The eight-week blockade of Hormuz forced buyers to seek alternate supplies, tightening markets. In Europe jet fuel that traded near $831 per tonne in late February briefly spiked to about $1,838/tonne in early April and has generally remained above $1,500/tonne since.
Refining bottlenecks
Jet fuel is a refined product, so its availability depends on refinery output. Europe has closed several refineries in recent years; the UK now operates only four, and imports provide roughly 65% of UK jet-fuel needs. With refined output constrained, jet fuel prices have risen faster than crude oil. East Asian refineries could help but many rely on Middle Eastern crude and so their ability to boost exports is limited.
Airlines, schedules and fares
Fuel accounts for roughly 25–30% of airlines’ operating costs. Many carriers use hedging to limit volatility but rapid market moves can still cause large unhedged exposures. Airlines have reacted by cutting capacity and raising fares. Several carriers — including Air France‑KLM, Air Canada and SAS — have trimmed summer schedules, and Lufthansa plans to remove about 20,000 flights through October. Long‑haul ticket prices have jumped sharply on some routes; a June London–Melbourne fare was estimated to be about 76% higher than a year earlier. Some operators have added fuel surcharges or signalled they will pass increased fuel costs to passengers. Short‑haul markets are mixed: low‑cost carriers with strong hedges or flexible pricing have in some cases cut fares to stimulate demand, while others facing larger fuel bills have tightened capacity.
Risk of physical shortages
Beyond high prices, there is a genuine risk of shortages at certain airports. The International Energy Agency warned in mid‑April that Europe might have only about six weeks’ supply of jet fuel if Gulf flows were not replaced. Increased imports from the United States have helped but do not cover the full gap. US refineries mainly make Jet A, which has a higher freezing point than the Jet A1 specification used widely elsewhere, and not all US plants can produce Jet A1, limiting some transatlantic shipments. Key storage hubs such as Amsterdam–Rotterdam–Antwerp are at multi‑year lows. Europe previously held about 37 days’ supply; some estimates now put that nearer 30 days, while roughly 23 days is commonly viewed as a critical threshold at which airports could begin to face shortages and cancellations. Any shortfall would be uneven: larger hubs are likely to be prioritised ahead of smaller airports.
Policy and operational responses
Governments and regulators are adopting measures to reduce disruption. In the UK, authorities are considering allowing carriers to surrender flights in advance without losing take‑off and landing slots, reducing the incentive to operate near‑empty services simply to retain slot rights. Refineries have been asked to prioritise jet fuel production where possible, and officials are exploring ways to facilitate imports of compatible fuels from the US despite infrastructure limits. The European Commission has indicated that cancellations and severe delays caused by fuel shortages will be treated as “exceptional circumstances,” which may relieve airlines from some passenger‑compensation obligations while still requiring refunds or rerouting. Regulators may also relax rules on “tankering” — carrying extra fuel from cheaper airports — despite its inefficiency, because it can ease local shortages.
Longer‑term options
Short‑term fixes address symptoms rather than the underlying vulnerabilities. Rebuilding refining capacity in Europe would be capital‑intensive and slow. Scaling up Sustainable Aviation Fuel (SAF) is a strategic alternative: SAF produced from waste oils, residues, energy crops or via power‑to‑liquid e‑fuels can reduce lifecycle carbon emissions. However, current SAF supply is tiny, expensive (often well above conventional fuel prices), and largely imported. The UK and EU have mandates to increase SAF use over coming decades, but meaningful domestic scaling will require substantial investment and time.
Outlook
In the near term, prices are unlikely to fall sharply while the Strait of Hormuz remains disrupted and refining constraints persist. Airlines are already reshaping schedules and passing costs onto passengers, and regulators are adjusting rules to limit widespread chaos. If physical supply constraints worsen, selective shortages and cancellations at smaller airports are possible, which could make this summer particularly challenging for the aviation sector and travelers.