Europe only has six weeks of jet fuel supply left, energy chief warns
Europe has just six weeks’ supply of jet fuel left, an energy chief has warned, fearing it could be “the biggest energy crisis we’ve ever faced”.
International Energy Agency President Fatih Birol added that if the Strait of Hormuz remains closed during the Iran war, flight cancellations will begin “soon” and this could throw summer holidays into chaos.
It comes as EasyJet said it expected a pre-tax loss of between £540 million and £560 million for the six months to the end of March, when the airline spent an extra £25 million on jet fuel last month.
US president Donald Trump’s ongoing blockade of the strategic shipping route has halted much of the world’s oil supply in the Gulf and caused fuel prices to soar.
This has sparked fears of flight delays and cancellations for Britons preparing to travel for the half-term break.
Speaking in Paris on Thursday, Mr Birol said: “In the past there was a group called ‘Dire Straits’. Now this is a very difficult strait and it will have huge impacts on the global economy. And the longer it lasts, the worse it will be in terms of economic growth and inflation around the world.”
The effect will be “higher oil” [gasoline] prices, high gas prices, high electricity prices” and that it will affect some parts of the world “worse than others”, he said, adding that Asian countries such as Japan, Korea, India, China, Pakistan and Bangladesh are expected to feel the biggest impact.
If oil does not start flowing through the Strait of Hormuz, he said, Europe and America will follow. “I can say that we will soon hear the news that some flights from city A to city B may be canceled due to lack of jet fuel.”
While airlines across Europe, including those in the UK, are warning of higher fares and flight cancellations, Ryanair’s chief executive Michael O’Leary this week said the airline was considering cutting 10 per cent of its flights.
Scandinavian airline SAS has canceled more than 1,000 flights this month and confirmed it has temporarily increased prices due to rising jet fuel costs.
Easyjet said the war had created “short-term uncertainty around fuel costs and customer demand”, with bookings down two percentage points in the three months to both June and the end of September compared with a year ago.
A spokesman for Ryanair said: “We do not expect any fuel shortages in the near term, but the situation is fluid. Currently our fuel suppliers are able to guarantee supplies until mid-May. If the Iran war ends soon, supplies will not be disrupted. If the closure of the Strait of Hormuz continues into May or June, then we cannot rule out risks to fuel supplies at some airports in Europe.”
“With jet oil prices doubling in March, we expect all airlines to pass on these higher costs in the form of higher airfares after Easter and later this summer.”
Airlines led the stock market declines in London on Monday as concerns about jet fuel supply and cost shortages deepened.
Airports could face jet fuel shortages within weeks if the Strait of Hormuz remains closed, Airports Council International Europe said last Friday.
A spokesman for Airlines UK said: “UK airlines are not currently seeing any disruption to jet fuel supplies in the UK, due in part to the country’s supply from a variety of sources, and they continue to liaise with fuel suppliers and the Government to monitor the situation.
“We are talking to the Government about the significant measures that will be required to support aviation in the event of fuel disruptions, including reducing regulatory burdens to protect consumers, trade and the UK’s competitiveness.”
