The recent ceasefire between the United States and Iran has brought a measure of relief to global energy markets but the aviation sector confirmed that jet fuel prices and supply chains will take months to stabilise even if the Strait of Hormuz reopens fully.
Willie Walsh the Glasnevin-born director general of the International Air Transport Association revealed that the disruption to refining capacity in the Middle East which forms a critical part of the global supply of refined products means recovery will not occur quickly. He confirmed that if the strait reopens and remains open it will still take a period of months to restore supply to the levels required.
But while there are warnings about short to mid term fuel supply, the long term prognosis seems much more hopeful. The January 2027 NYMEX WTI crude oil futures (CLF27) are trading around $73–$74 per barrel. These futures, representing long-term market expectations, are currently priced lower than the front-month contracts, reflecting a forecasted cooling from early 2026 price spikes.
The conflict that began in late February 2026 forced the effective closure of the Strait of Hormuz through which 20pc of the world’s oil normally flows. This chokepoint handles a substantial share of crude and refined products destined for international markets. Global refining capacity contracted by 10pc to 12pc after operations in the conflict zone halted the processing of more than two million barrels per day in the Middle East. More than three million barrels per day of regional refining capacity shut down because of direct attacks and the absence of viable export routes. Jet fuel which derives from kerosene refined from Gulf crude suffered particularly acute shortages because the region supplies over half of Europe’s jet fuel imports under normal conditions.
Europe stands among the most exposed regions. Twenty five to 30pc of its jet fuel demand originates from the Persian Gulf and the Middle East Gulf accounts for more than half of its imports.
Independent stock levels at the Antwerp Rotterdam Amsterdam hub have already fallen and the Airports Council International confirmed that systemic jet fuel shortages could become reality across the European Union within three weeks if passage through the strait does not resume in any significant and stable way. The body urged the European Commission to monitor supply for the next six months and identify actions to increase production within the European Union.
Asia faces its own constraints. Eighty four per cent of crude passing through the Strait of Hormuz normally heads to Asian markets and countries such as India and China which maintain large refining operations now encounter limits on feedstock availability. Africa depends on the corridor for approximately 70pc of its jet fuel imports which has left the continent’s aviation network vulnerable to operational interruptions. In contrast the United States with its 18m barrels per day of refining capacity concentrated on the Gulf Coast has seen utilisation rates climb to 92pc and higher on the Gulf Coast. American refiners have benefited from increased export demand as Asian and European buyers seek alternatives but this advantage does little to ease the global tightness.
The International Monetary Fund confirmed that diesel and jet fuel shortages will persist for some time. The organisation pointed to a 13pc reduction in the daily flow of the world’s oil and a 20pc cut in liquefied natural gas which have sent energy prices higher and disrupted supply chains.
Airline chief executives have responded with practical measures. Ed Bastian the chief executive of Delta Air Lines confirmed that the carrier will reduce its planned capacity growth in the second quarter by 3.5pc because of the pressure from higher fuel costs. Other carriers have reported operating costs rising by hundreds of millions of euros in the current quarter alone. Many airlines have cut services added refuelling stops and increased fares to offset the more than doubling of jet fuel expenses since the conflict began.
The crisis has exposed long standing vulnerabilities in the aviation fuel supply chain. For years the industry relied on the efficiency of Middle Eastern refineries which produce high yields of jet fuel from the region’s crude. That dependence turned a regional conflict into a global shock that affects ticket prices flight availability and the broader recovery of international travel. Airports Council International has warned that without urgent monitoring and action the shortages will extend into the peak summer season and beyond. European airports in particular risk fuel rationing that could force carriers to cancel flights or operate at reduced capacity.
Governments and industry leaders must now address the structural weaknesses that the Hormuz disruption laid bare. Investment in diversified refining capacity within Europe and other import heavy regions offers one path forward. Asian nations should reassess their focus on crude imports and expand domestic production of refined products such as jet fuel to build greater energy security. International coordination through bodies such as the International Air Transport Association and the International Monetary Fund can help align policy responses and accelerate the restoration of supply chains. The temporary nature of the ceasefire also serves as a reminder that geopolitical risks in the Middle East will continue to threaten stable fuel flows.
Airlines have already absorbed substantial cost increases and passed some of those on to passengers. The full economic impact will become clearer in the coming months as data from April and May reveal the extent of capacity reductions and route adjustments. What remains certain is that the months required to rebuild refining output and replenish stocks will test the resilience of carriers airports and the travelling public. The aviation sector has demonstrated its ability to adapt to sudden shocks in the past but this episode confirmed that reliance on a single strategic waterway for a vital commodity carries unacceptable risks in an interconnected world.
The coming weeks will determine whether the ceasefire delivers lasting stability or merely a pause in the supply crisis. Until refining capacity in the Middle East returns to pre conflict levels and alternative sources scale up the pressure on jet fuel prices and availability will remain. Airlines and their passengers will continue to bear the cost of that delay in the form of higher fares and fewer flight options. Policymakers who recognise the scale of the challenge now have the opportunity to strengthen global energy security before the next disruption strikes.
