EU Faces Jet Fuel Squeeze Risk Arabian Post

(MENAFN- The Arabian Post) clearfix"> Brussels has warned that Europe's aviation fuel market could tighten further within weeks if disruption around the Strait of Hormuz continues, raising the prospect of higher fuel costs, pressure on airline schedules and fresh strain across the bloc's energy supply chain before the peak summer travel season.

The warning, issued after meetings of the European Commission's oil and gas coordination groups, marks a sharper assessment of the risks facing the European Union's fuel system. Officials said the closure of the Strait of Hormuz is affecting crude oil and major petroleum products, with all EU countries exposed to market dynamics linked to the disruption. Consumer-level physical shortages have not materialised, but price effects are already being felt and jet fuel has emerged as the main concern.

The Strait of Hormuz is one of the world's most important energy chokepoints, linking Gulf producers to global markets. The route has been central to flows of crude, refined fuels and liquefied natural gas. Its prolonged closure has forced traders, refiners and airlines to redraw supply routes, sending cargoes on longer voyages and intensifying competition for barrels from the Atlantic Basin, West Africa and Asia.

European fuel markets have so far avoided an immediate breakdown because suppliers have redirected cargoes from the United States, Nigeria, India and other markets. That flexibility has helped keep aircraft flying, but at a higher cost. Jet fuel prices in Europe rose above $200 a barrel in April, while global aviation fuel trade has become less efficient as tankers cover longer distances to replace Middle Eastern supply.

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The Commission's Oil Coordination Group has concluded that emergency fuel stocks can be released if needed, but such action would have to be coordinated across the bloc and paired with fuel-saving measures. Officials are concerned that drawing down reserves without reducing demand could limit the duration and effectiveness of any intervention. That has placed the aviation sector, national energy authorities and airports under pressure to prepare contingency plans rather than assume that market rerouting alone will be sufficient.

Jet fuel demand remains resilient despite higher prices. Global consumption is expected to average about 7.77 million barrels per day this year, broadly steady compared with 2025, as air travel continues to recover and airlines maintain capacity on major routes. That stability in demand is one reason supply pressure is becoming more difficult to absorb. Unlike some petroleum products, aviation fuel has strict quality and safety requirements, limiting the scope for substitution.

European aviation is particularly vulnerable because fuel typically accounts for 30 to 40 per cent of airline operating costs. Carriers have managed the first phase of the shock through hedging, fare increases and adjusted supply contracts, but the margin for absorbing further increases is narrowing. Airlines globally are expected to face billions of dollars in additional fuel costs this year, and operators in Europe may be forced to reassess schedules if fuel availability becomes uneven across airports.

Larger hubs have more options because of stronger storage capacity, deeper supplier networks and better access to alternative import routes. Smaller regional airports face greater exposure if local stocks decline or if suppliers prioritise higher-volume locations. That imbalance could affect holiday routes, low-cost airline operations and connectivity in parts of southern and eastern Europe if market stress extends into June and July.

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Fuel inventories are already showing signs of pressure. Commercial stocks have fallen as the disruption has persisted, while the Amsterdam-Rotterdam-Antwerp trading hub has faced tighter middle distillate availability. Singapore stocks have also weakened, adding to global competition for cargoes. These pressures suggest that Europe's challenge is not only replacing lost supply, but doing so at a price that does not undermine airline economics.

Regulators have also moved to clarify operational rules. Guidance for the transport sector has covered slot flexibility and fuel-use issues, while aviation safety authorities have addressed the use of Jet A fuel in Europe. Such measures are intended to give airlines and airports more room to manage disruption without compromising safety standards.

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