IEA Warns Europe Faces Jet Fuel Shortage by June

The International Energy Agency (IEA) has warned that Europe could face severe jet fuel shortages as early as June due to disruptions caused by the Iran war. The closure of the Strait of Hormuz, a critical route for Middle Eastern oil exports, has significantly impacted global supply chains.

According to IEA executive director Fatih Birol, Europe may have only six weeks of jet fuel left if it cannot replace at least half of its imports from the Middle East. The agency's monthly report highlights that Gulf region exports are a major source of jet fuel for the global market, and refineries in Asia rely heavily on crude oil imports from the Middle East.

The IEA reports that Europe has historically relied on the Middle East for about 75% of its jet fuel imports. With the Strait of Hormuz effectively closed by Iran, European countries are scrambling to replace supplies with imports from the US and Nigeria. However, even these shipments would only replace a little over half of the lost supplies.

Analysts warn that if Europe cannot replace more than 50% of its Middle Eastern imports, physical shortages may emerge at select airports, leading to flight cancellations and demand destruction. The situation is further complicated by surging jet fuel prices, which have hit an all-time high of $1,838 per tonne.

European airlines are already feeling the impact, with EasyJet reporting £25 million in additional fuel costs in March due to the Middle East conflict. The crisis has prompted emergency measures from airlines and calls for government intervention to mitigate the economic impacts on European economies that rely heavily on air travel.