UK Braces for Jet Fuel Crisis as Final Middle East Shipment Approaches
The last known shipment of jet fuel to Britain from the Middle East is scheduled to arrive within the next 48 hours, amid escalating concerns that a severe shortage could be less than a week away. The Libyan-flagged vessel Maetiga, carrying the consignment from Saudi Arabia, is expected to dock in the UK on Thursday, according to data from industry providers Kpler and Vortexa.
Strait of Hormuz Blockage Halts Supplies
The ongoing conflict in the Middle East has led to a near-total closure of the Strait of Hormuz, a critical maritime chokepoint through which approximately 40% of Europe's jet fuel normally flows. Data analysts confirm that no other cargoes destined for the UK from the region are currently visible on the water, effectively cutting off direct supplies. The UK currently sources at least half of its jet fuel from the Middle East, a dependency exacerbated by reduced domestic refining capacity and the halt on Russian imports since the 2022 invasion of Ukraine.
While the UK receives some direct shipments, additional supplies typically arrive indirectly via countries like Belgium and the Netherlands. However, the blockade has disrupted these channels, heightening fears of an impending crisis.
Airline Industry Sounds Alarm Over Soaring Costs
Industry experts warn that supply issues could severely impact airlines by the end of next month if the conflict involving Iran persists. The Financial Times reports that jet fuel prices have skyrocketed, with the Airlines for America group noting a price of $4.24 per gallon last Thursday, compared to $2.50 just before the initial US-Israeli strikes on Iran.
Aviation analyst Alex Macheras highlighted that the US Jet Fuel Index has surged by 72% in the month since the war began, massively outpacing even Brent crude's rise. He cited United Airlines, where jet fuel prices have more than doubled in three weeks, potentially pushing the airline's annual fuel bill to $11 billion—more than double its best-ever annual profit.
Macheras tweeted a stark warning: A serious jet fuel shortage is less than a week away across multiple different markets, including at some major European airport hubs - who are informing airlines to prepare for a potential "no-fuel available here" scenario. He added that this is not confined to Europe, with international airlines from Asia, South America, and Africa devising contingency plans, including fuel stops en route, as shortages reach unprecedented levels.
Government Response and Political Criticism
Prime Minister Sir Keir Starmer has called an emergency Cobra committee meeting to assess contingency plans for potential shortages of diesel, jet fuel, and fertiliser. Yesterday, he appealed to oil and banking executives for assistance, stating: The Government can't do it on its own, and emphasised a focus on de-escalating the crisis that has blocked the Strait of Hormuz, which normally carries 20% of the world's oil.
Despite a recent jet fuel cargo arrival from Nigeria at Milford Haven and government assurances for holidaymakers to book as normal, shadow transport secretary Richard Holden criticised Labour's energy failure. He argued that rising jet fuel prices, driven by Middle East conflict, would force airlines to pass costs onto families, compounded by Labour's hikes to air passenger duty and airport business rates. Holden blamed Labour's net zero policies for undermining energy security, warning that family holidays are at risk.
Global Aviation Industry Reels from Price Surge
The surge in jet fuel prices has triggered widespread responses from airlines worldwide:
- Aegean Airlines anticipates a notable impact on first-quarter results due to suspended Middle East flights and fuel price spikes.
- Air France-KLM plans to increase long-haul ticket prices by 50 euros per round trip.
- Air New Zealand has suspended its full-year earnings forecast and raised fares, with potential further adjustments if costs remain high.
- American Airlines expects a $400 million increase in first-quarter expenses.
- Cathay Pacific will raise fuel surcharges from April 1, with bi-weekly reviews.
- EasyJet CEO Kenton Jarvis predicts higher ticket prices by late summer as fuel hedges expire.
- IAG, owner of British Airways, has hedged much of its fuel but remains cautious.
- United Airlines is modelling Brent oil at up to $175 a barrel, with potential annual fuel bill increases of $11 billion, and is cutting unprofitable flights.
- SAS has cancelled 1,000 flights in April due to high fuel costs.
Credit ratings agency Moody's warns that low-cost and ultra-low-cost carriers in the US would be hardest hit, with operating profits potentially halving if fuel prices stay elevated. A spokesperson for the Department for Energy Security and Net Zero stated that jet fuel shipments continue to arrive from India, the USA, the Netherlands, and other countries, but the situation remains volatile.
