Step onto the tarmac at any major airport and the smell of jet fuel is unmistakable. Lately that familiar scent has become much more expensive. Since the start of the conflict in the Middle East and the closure of the Strait of Hormuz, jet fuel prices on international markets have surged and there are growing fears of physical shortages in some regions ahead of the peak summer travel season.
Why prices have jumped
The Gulf typically exports a large share of the world’s jet fuel – about 20% of traded volumes – and Europe is a major buyer because its refining capacity is limited. With supplies from the Gulf disrupted by an eight-week blockade of Hormuz, buyers have scrambled for fuel from other sources, driving prices sharply higher. In late February jet fuel traded around $831 per tonne in Europe; by early April it had briefly touched $1,838/tonne, more than doubling, and has since stayed mostly above $1,500.
Refining bottlenecks
Jet fuel is a refined kerosene product, so availability depends heavily on refining capacity. Europe has seen several refinery closures in recent years; the UK now has just four operating refineries, and imports supply roughly 65% of UK needs. Reduced refining output means jet fuel prices have risen faster than crude oil prices.
Airlines, schedules and fares
Fuel is one of airlines’ biggest costs (about 25–30% of operating expenses). Many carriers hedge fuel purchases to limit exposure, but hedging cannot fully shield them from swift market moves. Some airlines fully hedged and still faced extra costs; others that hedged less or not at all have been hit harder.
Carriers have responded by cutting capacity and raising fares. Air France-KLM, Air Canada and SAS have trimmed summer schedules; Lufthansa announced the removal of around 20,000 flights through October. Long-haul fares have risen markedly, especially on routes once served by Gulf carriers: a June London–Melbourne fare was estimated to be 76% higher than a year earlier. Some airlines have added fuel surcharges; others vow to pass on cost increases to passengers.
Short-haul markets have been mixed. Intra-European low-cost carriers with strong hedges or flexible pricing have sometimes cut fares to stimulate demand, while better-hedged operators may exert pressure on rivals less well protected.
Risk of running out
Beyond high prices, there is a risk of actual shortages. The International Energy Agency warned in mid-April that Europe had “maybe six weeks of jet fuel left” if lost Gulf supplies were not replaced. Increased imports from the US have helped, but have so far replaced only part of the shortfall. East Asian refineries, which could supply extra volumes, themselves depend on Middle Eastern crude and have been constrained. India was a significant supplier until EU restrictions on products derived from Russian crude curtailed those exports.
US refineries mainly produce Jet A, which has a higher freezing point than the Jet A1 specification used in most of the world; not all US plants can make Jet A1, limiting transatlantic shipments. Key storage hubs such as Amsterdam–Rotterdam–Antwerp are at multi-year lows. Before the conflict Europe held about 37 days’ supply; some analyses now estimate nearer 30 days, with roughly 23 days seen as a critical threshold where airports could start experiencing shortages and cancellations. Any shortfall would not affect all airports equally; large hubs are likely to be prioritised over smaller stations.
Policy and operational responses
Governments and regulators are preparing measures to reduce disruption. In the UK, authorities are considering allowing airlines to give up flights in advance without losing precious take-off and landing slots, reducing the incentive to operate half-empty services merely to preserve slot rights. Refineries have been asked to prioritise jet fuel production and officials are exploring whether imports of US Jet A1 can be facilitated given infrastructure limits.
The European Commission has signalled that cancellations and severe delays caused by fuel shortages will be treated as “exceptional circumstances,” which relieves carriers from paying passenger compensation while still requiring refunds or rerouting. Regulators are also likely to relax restrictions on “tankering” — taking extra fuel on departure from cheaper airports to reduce refuelling needs at pricier destinations — despite its fuel-inefficient implications, because it can ease local shortages.
Longer-term options
Those short-term fixes address symptoms rather than causes. Rebuilding refining capacity in Europe would be costly and slow. Another strategic option is to scale up Sustainable Aviation Fuel (SAF) production. SAF can be made from waste oils, agricultural residues, energy crops, or via e-fuels using renewable power; it generally offers lifecycle carbon savings compared with fossil jet fuel. The UK and EU have mandates to increase SAF use over coming decades, but current supply is tiny, expensive (often more than $1,000/tonne above conventional fuel) and largely imported from East Asia. Scaling SAF at meaningful volume in the UK or Europe would require substantial investment and time.
Outlook
In the near term, jet fuel prices are unlikely to fall rapidly while the Strait of Hormuz remains disrupted and refining constraints persist. Airlines are already reshaping schedules and passing on costs to passengers, and regulators are adjusting rules to limit chaos. If physical supply constraints worsen, selective airport shortages and cancellations are possible, making for a potentially difficult summer for the aviation industry and holidaymakers.
