Europe’s Jet Fuel Crisis Under the Shadow of the Iran War

By Wei Cheng

Since the outbreak of the Iran war, global jet fuel prices have doubled as the conflict disrupted the production and transportation of crude oil and petroleum products in the Middle East. Notably, the price of jet fuel — a refined product — has surged far beyond the increase in crude oil prices.

Although the European jet fuel wholesale benchmark (CIF NWE) saw a slight pullback in April, the real issue facing European airlines is not the “paper price” but “physical availability.” Due to blocked Middle Eastern supplies, shipping delays, and declining airport inventories, the International Energy Agency (IEA) has warned that Europe’s jet fuel stocks may only last for a few weeks.

Jet fuel is a middle distillate fuel separated from crude oil and refined through processes such as fractionation and hydrotreating in refineries. Approximately one-fifth of the world’s seaborne jet fuel and crude oil must pass through the Strait of Hormuz. The Iran war has brought this vital shipping lane to a near-standstill, making it difficult for Gulf nations to export fuel and oil, directly causing supply tightness in regions like Europe. Fuel is an airline’s second-largest cost, following labor. A single-aisle commercial jet burns roughly 800 gallons of jet fuel per hour, with widebodies consuming even more. Under the dual pressure of supply constraints and rising costs, many airlines have been forced to hike fares or even cancel flights.

Structural Weakness: The “Achilles’ Heel” of Europe’s Fuel Supply

The European aviation industry is one of the regions most affected by the Iran war, with the resulting jet fuel crisis profoundly impacting the sector.

Many factors have contributed to this crisis, including at least the following five reasons:

First, Europe is heavily dependent on imported jet fuel. According to IEA data, this dependence on the Middle East exists at two levels: in terms of trade structure, approximately one-third of the jet fuel Europe consumed last year was imported, with 75% of those imports coming from the Middle East. Furthermore, even for jet fuel produced in local European refineries, the crude oil supply is highly dependent on the Middle East. This means Europe has a structural dependence on the region across the entire jet fuel supply chain. Supply disruptions and transport delays caused by the war have led to a rapid decline in jet fuel inventories at European airports, with some hubs facing a “high price, no oil” scenario.

Second, while U.S. jet fuel has emerged as the primary alternative source for Europe since the war began, an increasing volume of U.S. supply is flowing to the Asia-Pacific region rather than Europe.

Third, Europe has relatively few jet fuel refineries compared to other parts of the world, and several have been closed in recent years.

Fourth, flights from Europe to East Asia must now detour to avoid war zones, generally increasing flight times by one to three hours and subsequently raising fuel consumption. This rerouting is caused by the overlap of two geopolitical “no-fly zones”: the closure of Ukrainian and Russian airspace due to the Russia-Ukraine conflict, and the recent Middle East war zone. This has forced Europe-East Asia routes to stretch to the extreme northern and southern perimeters.

Fifth, European airlines face high carbon emission costs, which further increase operational pressure amid energy shortages. The EU’s ReFuelEU Aviation regulation mandates the blending of Sustainable Aviation Fuel (SAF). During a fossil fuel shortage, SAF serves as an alternative, but its price is typically more than double that of conventional jet fuel. This has trapped European carriers in a financial dilemma: “no flight without oil, but certain loss with green oil.” Although non-EU countries like the UK have their own emission mandates, the entire continent is facing fuel costs generally higher than the global average due to the double squeeze of the energy crisis and the green transition.

In short, the convergence of multiple factors has forced European airlines to raise fares and cut capacity, with some flights canceled due to the inability to secure fuel.

Recently, several major international organizations have warned of a grim outlook for the European aviation industry.

On April 16, the head of the IEA stated that Europe has only six weeks of jet fuel supply, after which shortages will begin to trigger flight cancellations.

On April 20, the International Air Transport Association (IATA) warned that cancellations in Europe could begin within weeks due to the fuel shortage caused by the war.

IATA Director General Willie Walsh stated: “We estimate that by the end of May, we may start to see some flight cancellations in Europe due to a lack of jet fuel. This is already happening in parts of Asia. Besides doing everything possible to secure alternative supply lines, it is important that authorities develop well-communicated and coordinated plans in case rationing becomes necessary, including providing slot relief.”

On April 22, the EU announced the establishment of a “Jet Fuel Observatory” to track production, imports, exports, and inventory levels within the bloc to identify potential shortages. The EU stated it hopes this move will “mitigate the impact of high prices and potential shortages on the EU aviation industry.”

On the same day, EU Energy Commissioner Dan Jorgensen said in a media interview that Europe is “in a very serious crisis,” warning that it is “highly likely” that Europeans’ holiday plans will be affected, either by flight cancellations or extremely expensive tickets.

Previously, Airlines for Europe (A4E) called on the EU to take emergency measures, including real-time monitoring of jet fuel stocks and providing clear interpretations of existing fuel-related legislation.

ACI Europe, representing European airports, also wrote to the EU warning that unless the Strait of Hormuz opens soon, European airports could begin running out of jet fuel within the next three weeks. The organization called for a monitoring platform to coordinate the response.

Refinery Shrinkage and Asia-Pacific “Poaching”

According to data from the European Fuel Manufacturers Association, nearly 100 refineries were operating in Europe back in 2009. Since then, 28 refineries — more than 25% of the total number and 16% of refining capacity — have been closed or converted.

As Europe’s own refineries closed due to declining demand and emission-reduction policies, dependence on imported jet fuel increased. Following the 2022 collapse of Russian natural gas supplies, the current energy crisis triggered by the Iran war has caught Europe off guard regarding energy security for the second time in just four years.

For Europe, the only current alternative for sourcing jet fuel is the United States. However, U.S. supplies are insufficient to offset the loss of Middle Eastern fuel, and Europe faces increasingly fierce competition from Asia. This oil crisis hit Asia first, leading Asian refiners to cut runs and governments to implement export restrictions to preserve domestic supply.

Ernest Censier, market analyst at Vortexa, noted in a recent report that Northwest Europe is one of the hardest-hit regions. Jet fuel imports in April have fallen below historical norms, and the decline is expected to accelerate as more U.S. cargoes head to Asia.

Censier stated that European jet fuel imports fell by 15% in the first half of April, reflecting a structural dependence on Middle Eastern supply: “Approximately half of Northwest Europe’s jet fuel imports typically transit through the Strait of Hormuz.”

He added that the voyage time from Mina Abdulla in Kuwait to Rotterdam in the Netherlands is only about 21 days. This relatively short transit time means that supply disruptions are quickly reflected in European import data.

He also pointed out that while the U.S. has become a key substitute, this is unlikely to last as U.S. exports are increasingly redirected toward the Asia-Pacific region, reaching a seven-year high in the first half of April and accounting for over 30% of total U.S. jet fuel exports. “This reallocation reflects a broader shift in U.S. product exports toward the Asia-Pacific,” Censier said.

Cuts, Hikes, and Groundings: Self-Preservation and Helplessness

To cope with the shortage, some European airlines have begun taking emergency measures.

Germany’s Lufthansa Group announced it will cut 20,000 European short-haul flights this summer as soaring fuel prices have made many routes “unprofitable,” with some cuts potentially becoming permanent. Lufthansa is re-evaluating its entire European flight schedule and will release more details in late April.

Lufthansa will also prematurely retire 27 aircraft from its short-haul subsidiary, CityLine, and ground four aging Airbus A340–600 long-haul aircraft by the end of this summer. These four-engine models have lost all commercial viability given current jet fuel prices of $200 per barrel. Additionally, Lufthansa will reduce five more short and medium-haul aircraft for the 2026/2027 winter season.

Air France-KLM plans to increase long-haul fares to offset soaring costs, with round-trip prices set to rise by 50 euros (approx. $58).

Its subsidiary, KLM, has already begun adjusting its schedule, explaining that rising fuel prices have made certain flights “no longer financially viable.”

Budget carrier EasyJet warned that its pre-tax loss for the first half of the year is expected to widen to £540 million–£560 million (approx. $731 million–$758 million), including £25 million in additional fuel costs in March alone.

EasyJet CEO Kenton Jarvis previously stated that consumers should prepare for fare hikes in late summer as existing fuel hedging contracts expire.

Scandinavian Airlines (SAS) announced it will cancel another 1,000 flights in April following hundreds of cancellations in March due to high oil and fuel prices. SAS has already raised ticket prices.

Norse Atlantic Airways stated it has canceled flights from London Gatwick to Los Angeles due to rising fuel costs.

Experts warn that late May 2026 will be a critical juncture. If the Strait of Hormuz remains closed, Europe may face a massive “flight meltdown,” where even those holding high-priced tickets may find no planes available.

While some Americans may feel complacent, thinking U.S. oil companies will benefit from the war, the reality is that the U.S. will not remain unscathed in the long run.

Although there is no immediate danger of the U.S. running out of fuel, the global shortage is pushing up jet fuel prices for U.S. carriers. They are now cutting cheap fares and less profitable flights, which is likely to drive up ticket prices for U.S. travelers, particularly during the summer.

United Airlines, for instance, has cut its planned schedule by about 5% over the next six months. CEO Scott Kirby told employees in March that the company could spend an additional $11 billion on fuel this year if conditions do not improve.

Budget carrier Spirit Airlines has applied for hundreds of millions of dollars in emergency funds from the Trump administration to offset rising fuel prices and avoid potential liquidation.

Americans are also paying a higher price to fly. According to Deutsche Bank, last-minute fares to popular vacation destinations — such as flights from the U.S. to the Caribbean — are up 74% from early April, while fares to Hawaii from the U.S. mainland are up 21%.

For global airlines, even in the most optimistic scenario where the U.S. and Iran quickly reach an agreement to reopen the Strait, the die is cast for summer travel. Airlines plan routes and set fares months in advance.

Relief for airlines and passengers is unlikely until the mid-to-late summer, as it takes months to restore normal supplies. “It’s going to take until at least July,” said Matt Smith, head U.S. analyst at Kpler. “And even that may be optimistic at this point.”

In conclusion, the jet fuel crisis in Europe is shifting from a “cost crisis” to a “physical crisis.” In the past, European airlines worried that tickets were too expensive for people to buy; now, they worry that even if passengers can afford the fare, the tanks under the wings will be empty.