Why jet fuel crisis could permanently change flying for travellers everywhere

Dubai: A global jet fuel crisis triggered by the Iran conflict is exposing deep vulnerabilities in the aviation industry that analysts, regulators and airlines say could persist long after disruptions in the Strait of Hormuz ease.

Governments and aviation executives are increasingly warning that the market turmoil is not a short-term supply shock but part of a broader structural problem facing airlines worldwide: growing dependence on fragile fuel supply chains, limited refining flexibility and the slow development of alternatives to conventional jet fuel.

The European Commission warned on Thursday that the global disruption around the Strait of Hormuz was already tightening petroleum markets and could significantly worsen jet fuel shortages within weeks.

“The Oil Coordination Group signalled that the closure of the Strait of Hormuz impacts both crude oil and all major petroleum products,” the Commission’s energy department said after meetings with EU oil and gas coordination groups. “If the situation does not improve in the next weeks, markets are expected to become increasingly tighter, especially for jet fuel.”

More than 20% of global jet fuel supply has effectively been disrupted by the closure of the Strait of Hormuz, according to industry estimates cited in EU discussions. About 41% of Europe’s aviation fuel passes through the waterway. Global shipments of jet fuel and kerosene fell below 2.3 million tonnes last week, the lowest level on record, according to Kpler data.

The world consumes roughly 100 million barrels of oil per day, with around 15 million barrels typically transported through Hormuz daily. While some crude exports can be rerouted through pipelines and ports, analysts say those alternatives cannot fully compensate for prolonged disruptions.

The impact is already spreading across global aviation markets. Lufthansa announced plans in April to cut 20,000 flights as fuel costs surged. .

Virgin Atlantic said it would raise fares to offset higher fuel prices, while IAG, the parent company of British Airways, said it was making “pricing adjustments”. Budget carrier Spirit Airlines ceased operations amid mounting financial pressure.

Airlines with large hedging programmes have gained temporary protection from price spikes. EasyJet said it had hedged 70% of its fuel requirements until September, while Lufthansa said it had locked in 80% of its fuel costs for the remainder of the year. Ryanair said it remained the most heavily hedged airline in Europe.

Jet fuel prices have doubled over the past two months as the Iran conflict escalated, according to the document.

Industry executives say the crisis is reinforcing concerns that airlines remain highly exposed to fuel market shocks despite years of efforts to diversify supply chains and improve efficiency.

The European Union Aviation Safety Agency (EASA) warned on Friday that fuel shortages could force European airports and airlines to rely more heavily on U.S.-supplied Jet A fuel instead of Jet A-1, the standard fuel grade used across Europe, Asia and much of Africa.

The distinction is operationally significant. Jet A has a higher freezing point than Jet A-1, creating additional risks during long-haul operations over cold regions.

EASA warned that confusion during any mixed-fuel transition period could create operational and safety risks if flight crews, fuel handlers or dispatch systems incorrectly assume which fuel grade has been loaded onto aircraft.

The regulator urged airlines, airports and fuel suppliers to strengthen fuel-grade labelling, update crew training and revise dispatch procedures while supply conditions remain unstable.

The disruptions are also drawing renewed attention to the aviation industry’s slow transition away from kerosene-based fuels.

Synthetic aviation fuel can be produced by combining carbon and hydrogen using renewable electricity, while hydrogen-powered jet engines have already been tested by companies including Rolls-Royce. Hydrogen fuel, though, requires cryogenic storage infrastructure and would require major redesigns across airports and aircraft fleets.

Aircraft manufacturers are simultaneously developing more fuel-efficient designs, including lighter airframes and concepts involving folding wings, though large-scale fleet replacement is expected to take decades.

Analysts say the economics of aviation fuel continue to favour conventional fossil fuels. Jet fuel remains largely untaxed internationally under rules established by the 1944 Chicago Convention on civil aviation, preserving the cost advantage of kerosene over lower-emission alternatives.

Banks and energy analysts warn that supply vulnerabilities are unlikely to disappear even if shipping routes stabilise.

Goldman Sachs said the United Kingdom faces the highest risk of shortages in Europe because of its dependence on imports routed through Hormuz and relatively low fuel reserves.

Aviation executives and regulators increasingly expect airlines to operate in an environment of structurally higher fuel costs, tighter inventories and greater operational complexity, even after immediate geopolitical tensions ease.