Aviation fuel supplies to Europe are under threat

The war between the United States and Israel with Iran and the subsequent rise in oil prices have threatened the supply of a significant amount of aviation fuel to Europe, reports the analytical company Kpler. The Bell drew attention to this.

According to experts, between 25% and 30% of jet fuel supplies to Europe pass through the Strait of Hormuz. The strait remains technically open, but commercial operators, major oil companies and insurers have effectively curtailed activities in the corridor.

Kpler notes that supply disruptions may be delayed but are likely to be prolonged, leading to a reduction in the supply of jet fuel in the European market.

If supplies through the Strait of Hormuz decrease, Europe will have to increase purchases from the Singapore Strait region and Northeast Asia, Vortexa believes. At the same time, European prices will have to rise compared to Asian prices to compensate for freight costs when transporting fuel to Europe.

As a result of trading, the spot premium for jet fuel reached four dollars per barrel - the last time such values ​​were recorded was in September 2022, at the height of the energy crisis in Europe against the backdrop of the war in Ukraine. This means that buyers are willing to pay above the exchange price for immediate delivery.

Jet fuel costs account for 25–30% of airlines' operating costs, and their increases are typically reflected in airfares.

Also, due to the war in the Middle East, gas prices have increased. Al Jazeera reported that benchmark wholesale fuel prices in the Netherlands and the UK increased by almost 50% after Qatar Energy suspended operations due to Iranian strikes. According to the TV channel, on March 2, Iranian drones attacked a gas facility in the city of Ras Laffan and another facility in Mesaieed.