NextFin News - A deepening jet fuel shortage triggered by the conflict in the Middle East is forcing airlines across Asia to ground fleets and cancel hundreds of flights, with energy analysts warning that the supply crunch is poised to migrate toward European markets within weeks. The effective closure of the Strait of Hormuz has severed the primary artery for crude oil and refined products, leaving global refiners unable to bridge a deficit that has already pushed jet fuel prices to record highs of $1,713.50 a ton in Europe.
The scale of the disruption is most visible in the Asia-Pacific region, where the reliance on Middle Eastern crude is highest. Air New Zealand has canceled 1,100 domestic flights, while Vietnam Airlines and budget carrier VietJet are slashing frequencies on both domestic and international routes. In the Philippines, President Ferdinand Marcos Jr. characterized the grounding of planes as a "distinct possibility" as the country scrambles to secure alternative supplies from China and Russia. Even major hubs are not immune; Sydney Airport recently issued a warning that it cannot guarantee fuel availability for the coming month.
Vikas Dwivedi, a global energy strategist at Macquarie Group, noted in an interview that the math of the aviation industry is currently unforgiving, stating that airlines simply cannot maintain flight volumes without the requisite fuel. Dwivedi, who has historically maintained a pragmatic, data-driven stance on energy markets, suggests that if the Strait of Hormuz remains blocked, the industry will see an acceleration of grounded aircraft. His assessment reflects a growing concern that the damage to global supply chains will persist for months even if the waterway were to reopen immediately.
While the crisis is currently centered in Asia, the European Union and the United Kingdom are particularly vulnerable to the next wave of shortages. According to data from Vortexa, roughly half of all jet fuel and kerosene imports into the EU and UK originate from refineries within the Persian Gulf. Philip Jones-Lux, a senior oil analyst at Sparta Commodities, estimates that European shortages could manifest as early as May. Jones-Lux argues that even if European refiners maximize production and delay scheduled maintenance, they lack the capacity to offset the volumes lost from the Middle East.
The financial burden is already being transferred to passengers. Willie Walsh, Director General of the International Air Transport Association (IATA), confirmed that higher fares are "inevitable" as airlines struggle to absorb costs that have doubled since the start of the year. Scandinavian airline SAS reported that the conflict has added approximately $300 to the cost of a single transatlantic flight per passenger, while Cathay Pacific has increased fuel surcharges on long-haul routes to $400 per round trip.
However, some analysts suggest the crisis may be more localized than a total global collapse. Sumit Ritolia, lead research analyst at Kpler, describes the current shortage as "uneven rather than systemic," noting that the tightness is most acute in import-dependent Southeast Asian nations. This perspective suggests that while regional disruptions are severe, markets with high domestic production or diverse supply chains, such as parts of the United States, may experience price volatility rather than outright fuel exhaustion. The U.S. West Coast remains a notable exception, as it relies on South Korean imports for nearly 20% of its jet fuel, linking its stability directly to the Asian refining sector's health.
The International Energy Agency (IEA) has attempted to mitigate the shock by releasing 400 million barrels of oil from strategic reserves. Yet, historical data indicates that only a small fraction of such releases typically consists of refined aviation fuel, with the vast majority being crude oil that still requires processing in a refining system already strained by the loss of Middle Eastern feedstock. As the Northern Hemisphere approaches its peak summer travel season, the margin for error in global fuel logistics has effectively vanished.
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