Loss of supplies from the Middle East could spread to Asia and Europe, with jet fuel shortages threatening to disrupt summer travel.
Until the United States and Israel attacked Iran on February 28, exports from the Persian Gulf were the largest single source of jet fuel to global markets, according to the International Energy Agency.
Iran’s blockade of the Strait of Hormuz has cut off jet fuel exports from around the world. Europe will be directly affected as it was the largest importer of Middle Eastern fuel supplies. According to the IEA, about 20% of the continent’s jet fuel comes from the Gulf.
Another major source of jet fuel exports to global markets are refineries in China, South Korea, and India. However, these refineries themselves rely heavily on crude oil from the Middle East. Before the war, about 90% of the oil exported from the Gulf through the strait was sent to Asia.
Matt Smith, Kpler’s director of commodity research, said Asian refineries are struggling to meet domestic and international demand for jet fuel due to the loss of crude feedstock.
“This is a slow-motion car crash,” Smith told CNBC’s “Squawk Box.” “We’re kind of sleepwalking.”
Global jet fuel exports fell 30% to 1.3 million barrels per day (bpd) in April from 1.9 million bpd in the same month a year ago, according to Kpler data. Jet fuel loaded on tankers last week was 18.6 million barrels, down 50% from 37.8 million barrels in the same week in 2025, the data showed.
“Jets are incredibly short.” valero energy Chief Operating Officer Gary Simmons told investors during the company’s April 30 earnings call. Valero is one of the largest independent refiners in the United States
Warning in Europe
If the Strait of Hormuz does not reopen, the European Union faces a “systemic jet fuel shortage,” the International European Airports Council, an industry group, warned the 27-nation economic union in an April 9 letter.
Rising jet fuel prices have already forced major airlines to cut flights. Lufthansa, one of Europe’s largest airlines, has cut 20,000 short-haul flights through October, partly due to fuel costs.
Jet fuel prices in Europe have doubled in the past year to $187 per barrel as of May 1, according to the International Air Transport Association.
As of April 21, there was “no evidence of a real shortage in Europe” but commercial jet fuel stocks were under pressure, European Commission Transport Commissioner Apostolos Tsitsikostas told reporters at a press conference at the time.
In a letter dated April 9, the Airports Association warned that fuel shortages will hit Europe unless exports through the Strait of Hormuz resume in a “significant and stable manner” within three weeks. Oil flows had not normalized in April and are unlikely to normalize soon even after the conflict ends.
“It’s going to take weeks, maybe months.” chevron CEO Mike Wirth told CNBC on Monday at the Milken Institute Global Conference in Los Angeles.
Wirth said the strait needs to be inspected for mines, but that will take time. He also said hundreds of ships will need to leave the Gulf and redeploy around the world to normalize supply chains.
Grace period has ended
Wirth told CNBC that fuel shortages will become a growing concern in the coming weeks. “The price signals have become very extreme in some regions and what we are really facing now is supply concerns,” he said.
Chief Financial Officer Andrew O’Brien said there was a grace period in the market as tankers that left the Persian Gulf just before the war arrived at their destinations in March and April, carrying oil and refined products. conocophilipsThe second largest U.S. oil company after exxon mobil And chevron.
O’Brien told investors during Conoco’s April 30 earnings call that the respite was nearing an end, as all pre-war shipments had arrived.
The market also relies on commercial inventories of crude oil and refined products to cushion the impact of supply disruptions, but these inventories will eventually decline to working minimum levels, he said. exxon mobil CEO Darren Woods said in an interview with CNBC on Friday.
O’Brien said the impact of oil supply disruptions in the Middle East on the global economy will begin to become clearer. He did not mention specific countries or regions, but said some countries dependent on energy imports could face severe supply shortages by June or July.
US refiners expand exports
Transport Commissioner Tsitsikostas said last month that the EU is working to secure alternative jet fuel supplies, particularly from the United States.
Valero and marathon oil It has sought to maximize jet fuel production to meet global demand. U.S. exports, which typically go to Latin America, jumped more than 400% to 94,000 barrels a day in April compared to February, when the war began, according to Kpler data.
In March, Valero increased jet fuel to 30% of its total distillate production from the usual 26%, according to Chief Operating Officer Simons. The company plans to start producing jet fuel at several refineries that currently do not produce fuel, the executive said.
marathon oil The company increased jet fuel production capacity by 30,000 barrels per day at its Garyville, Louisiana, refinery in March, CEO Marian Mannen told investors on an earnings call Tuesday.
The United States is less vulnerable to fuel shortages than Asia or Europe because of strong domestic production. But even there, the West Coast, particularly California, could face supply challenges.
The West Coast will import 93,000 barrels of jet fuel per day in 2025, more than 80% of which will come from South Korea, according to the Energy Information Administration. These Korean refineries could lose important oil supplies from the Middle East, which could negatively impact exports to the U.S. West Coast.
“What’s falling here is a series of dominoes falling,” Kepler’s Smith said. “The first place we’re going to go to is jet aircraft. Asia is the first region, but we’re going to see it spread all over the world and across our products.”
