Europe Jet Fuel Crisis: Six Weeks Left

IEA Chief Warns of Imminent Flight Cancellations Across Europe

Europe faces a severe jet fuel shortage. The International Energy Agency has sounded a stark alarm. IEA Executive Director Fatih Birol warned of possible flight cancellations “soon.” He said the continent has “maybe six weeks or so of jet fuel left.”

Birol described the situation as “the largest energy crisis we have ever faced.” He made the remarks in an interview with the Associated Press on Thursday. The Strait of Hormuz blockade is at the heart of the emergency. Iran effectively closed the strait after the US-Israel war on Iran began.

The IEA confirmed the warning directly to CNBC. It said several European countries may start facing jet fuel shortages within six weeks. That timeline depends on how much fuel Europe can import from international markets. The Middle East previously supplied 75% of Europe’s net jet fuel imports.

Birol used a pointed cultural reference to frame the gravity of the moment. “In the past there was a group called Dire Straits,” he said. “It’s a dire strait now, and it is going to have major implications for the global economy.” He added that the longer the blockade continues, the worse the economic damage will grow.

Economic Pain Will Spread Unevenly Across the Globe

Birol warned that the crisis will drive up costs across the board. He cited “higher petrol prices, higher gas prices, and high electricity prices” as direct consequences. He acknowledged that some parts of the world will suffer more than others. Developing nations face the sharpest immediate threat.

Birol named Japan, Korea, India, China, Pakistan, and Bangladesh as front-line victims. He also pointed to poorer countries across Asia, Africa, and Latin America. “The countries who will suffer the most will not be those whose voice are heard a lot,” he said. He added that the impact will then spread to Europe and the Americas.

Birol had already flagged a worsening outlook for April last month. “In April, there is nothing,” he warned. He said the loss of oil in April would be twice the loss seen in March. He also said LNG and other energy shortfalls would fuel inflation and cut economic growth, particularly in emerging economies.

Energy rationing, Birol suggested, could arrive soon in many countries. He stressed that the economic consequences are not distant or hypothetical. The blockade has already sent Brent crude oil futures more than 30% higher. That compares to prices before the war began at the end of February.

Airports and Airlines Sound the Alarm to Brussels

The Airports Council International Europe took direct action last week. ACI Europe sent the letter directly to the EU’s energy and transport commissioners. The letter warned that jet fuel shortages could begin as early as the start of May. That would happen if tankers do not resume passage through the Strait of Hormuz.

ACI Europe represents airports across the European Union. The group noted that air travel generates 851 billion euros in gross domestic product each year. That figure amounts to nearly one trillion US dollars. The sector also supports 14 million jobs across European economies.

Industry experts note that airports and airlines normally hold about six weeks of fuel supplies. However, the Iran war has stretched long enough to drain those buffers. The prolonged conflict has eroded those reserves significantly. Alternative suppliers do not carry enough capacity to replace Gulf volumes.

Industry insiders say that airports and airlines are now using their last reserves. The final cargoes shipped before the conflict began have now arrived in Europe. No significant new supply lines have replaced the interrupted Gulf shipments. The window to act is narrowing fast.

Airlines Begin Feeling Financial Pressure

European budget carrier EasyJet confirmed the commercial impact on Thursday. The airline said the Middle East conflict and rising fuel costs are weighing on bookings. Customer purchases for flights later in the year fell 2% compared with the prior year. The airline attributed the decline partly to rising fuel price uncertainty.

EasyJet also revealed a sharp rise in its fuel bill. The carrier absorbed roughly £25 million in additional fuel costs in March alone. That figure converts to approximately $34 million. To protect itself against further volatility, EasyJet hedged at least 70% of its summer fuel supply.

Other airlines have taken more drastic steps. Some carriers have cancelled flights that rising fuel costs made unprofitable. This is especially true for airlines without hedging arrangements in place. Those carriers face the full force of the price spike with no financial cushion.

Experts Warn Against Tehran’s Toll System for Ships

Analysts echoed the IEA’s warnings when they spoke to CNBC earlier this week. Claudio Galimberti, chief economist at Rystad Energy, addressed the airline sector directly. He said the situation “pretty much depends on how many barrels will be flowing through the strait.” His comments underlined the direct link between oil flow and aviation viability.

Rico Luman, senior economist at ING, also spoke to CNBC’s Squawk Box Europe on Tuesday. He noted that vessels have stopped moving through the strait. “Supplies from the Middle East have run out, and we need replacements,” he said. He called the need for alternative supply routes increasingly urgent.

Birol also addressed reports that Tehran established a so-called “toll booth” system for ships. Under the system, vessels pay a fee to travel through the strait. He warned against accepting this arrangement as a new norm. “If we change it once, it may be difficult to get it back,” he said.

Birol argued that tolerating the system could set a dangerous precedent for other global waterways. “It will be difficult to have a toll system applied here, but not there,” he said. He stressed a clear preference for unconditional oil flows. “I would like to see that the oil flows unconditionally from point A to point B,” he added.

Ceasefire Talks Continue But Offer No Immediate Relief

The US and Iran agreed to a two-week ceasefire last week. However, talks on ending the war failed over the weekend. Indirect negotiations brokered by Pakistan are continuing. No breakthrough has yet emerged to reopen the Strait of Hormuz to normal traffic.

The rapid increase in petrol prices has placed political pressure on US President Donald Trump. Markets remain volatile and nervous about the energy outlook. Europe is watching the diplomatic developments closely. The continent has very little time left before the fuel crisis moves from warning to reality.