The United Kingdom is at risk of rationing jet fuel due to shortages stemming from the ongoing Iran conflict, according to a warning from Goldman Sachs. The investment bank said the closure of the Strait of Hormuz has created “extreme tightness” in the market, leaving the UK especially exposed due to limited stockpiles, heavy reliance on imports, and constrained refining capacity.
Goldman Sachs noted that the UK is Europe’s largest net importer of jet fuel and holds no strategic reserves, meaning commercial inventories are the primary buffer. It warned that inventories, particularly in Britain, could fall to “critically low levels”, increasing the likelihood of rationing measures. The Gulf region supplies about one-fifth of globally traded jet fuel, and Europe is heavily dependent on those flows.
Jet fuel prices have doubled since the conflict began on 28 February, prompting some airlines to cancel flights. KLM and Lufthansa have already done so, while Ryanair’s chief executive Michael O’Leary said carriers are “desperately” looking for flights to cancel and could begin within weeks. IAG, parent of British Airways, has indicated it will raise fares to offset higher fuel costs, and Air France expects its jet fuel bill to rise by $2.4bn this year.
Prime Minister Keir Starmer has warned that travellers may need to rethink their holiday plans. A government spokesperson said UK airlines are not currently seeing a shortage of jet fuel, adding that fuel is typically bought in advance and airports keep stocks of bunkered fuel. However, fuel suppliers have warned that the UK has the “most limited visibility” in Europe regarding jet fuel supply due to its dependence on Middle Eastern imports.
Analysts point to the UK’s reduced refining capacity after the closure of Scotland’s Grangemouth refinery last April. The Tony Blair Institute argued that Europe’s climate-focused energy policies have contributed to higher prices and increased dependence on imports. Fuel suppliers said demand should remain manageable until mid-to-late June if the Strait of Hormuz remains closed.
