Jet fuel crisis, what crisis? European airlines downplay fears of summer shortage

• Jet fuel prices have surged to around $1,400 per metric ton, approximately double pre-conflict levels, as the Strait of Hormuz closure blocks about a quarter of Europe's jet fuel supplies from the Gulf region
• European airport operators increased jet fuel reserves by over 60% in April, while airlines secured alternative sources from the U.S. and Nigeria by paying premiums to offset Gulf supply disruptions
• Industry leaders including TUI, Lufthansa, and Ryanair CEOs claim supplies are secure through mid-July, though some regions like Amsterdam-Rotterdam-Antwerp show jet fuel stocks near record lows

European Airlines Downplay Jet Fuel Shortage Fears Despite Gulf Crisis

European airlines and airports are expressing confidence about jet fuel supplies despite a severe crisis that has doubled prices to approximately $1,400 per metric ton due to disruptions at the Strait of Hormuz, which handles a fifth of global oil flows and supplies a quarter of Europe's jet fuel.

Key Industry Statements:

Major airline CEOs are reassuring travelers ahead of peak summer season. TUI CEO Sebastian Ebel stated there's "absolutely no indication" of shortages, while Lufthansa CEO Carsten Spohr confirmed supplies are secured through mid-July. Ryanair and Wizz Air executives echoed similar confidence, though acknowledged premium pricing.

Supply Mitigation Efforts:

Airlines have secured alternative jet fuel sources from the U.S. and Nigeria by paying premiums. European airport operators increased jet fuel reserves by over 60% in April, according to i6 Group, following supply concerns at Italian airports. Lufthansa has replaced half of its Gulf supply shortfall with alternative sources and is drawing from reserves.

Market Context:

The optimism contrasts with warnings from the International Energy Agency (IEA) that global oil supply will not meet demand this year. Some European regions, including the Amsterdam-Rotterdam-Antwerp area, show jet fuel stocks near record lows according to LSEG data.

Strategic Implications:

Analysts suggest airlines are downplaying risks to protect summer bookings, the critical earnings period. EU Energy Commissioner Dan Jorgensen acknowledged no immediate supply issues but couldn't exclude longer-term problems depending on Middle East developments.

The conflict between Iran and the U.S. continues to block the Strait of Hormuz, creating ongoing uncertainty despite industry reassurances.