Jet fuel prices in Europe have exceeded $200 per barrel, airlines have already stripped 9.3 million seats from their summer schedules, and fares are rising sharply — all as a direct consequence of the conflict with Iran and the disruption it has caused at the Strait of Hormuz. With the peak summer travel season approaching, here is what is happening and what it means for passengers.
Why is there a jet fuel shortage?
The Strait of Hormuz is the chokepoint through which a large share of the world’s oil exports flow. The conflict has severely disrupted oil exports from the Persian Gulf, hitting the production of kerosene and jet fuel. Middle Eastern refineries, which supply more than 10% of global jet fuel and kerosene output, are struggling to ship cargo to buyers outside the region.
Jet fuel prices have been rising faster than crude oil since the conflict began. In Europe, prices have now exceeded $200 per barrel — a historic high — dealing a heavy blow to airlines.
Asia is the hardest hit
Asia is the region most exposed to the disruption, as it traditionally absorbs the largest share of oil passing through the Strait of Hormuz. According to data from OilX, compiled by Energy Aspects, Asian refinery production of jet fuel and kerosene fell to 2.9 million barrels per day in April, down more than 500,000 barrels per day compared with February.
Europe is also under severe pressure
Around 40% of the EU’s jet fuel is imported, and almost half of that normally passes through the Strait of Hormuz. Several European refineries have closed in recent years, unable to compete with larger Asian operations, leaving the continent more exposed.
Shell has announced that European refineries are now running at maximum capacity for jet fuel production, while Europe is increasing imports from North America and Africa. However, the International Energy Agency has warned that if Europe cannot replace more than half of its Middle Eastern supply losses, jet fuel stocks could reach critical levels as early as June. In that scenario, real fuel shortages at airports could trigger flight cancellations and a sharp fall in demand.
What about the United States?
Donald Trump has said the United States has “abundant” jet fuel stocks and rejected the idea of restricting exports to protect the domestic market. However, American refineries are already operating at record levels with limited room to increase output further, and most of their production is consumed domestically. The west coast remains 15% to 20% import-dependent, drawing mainly from South Korea.
Airlines are facing enormous cost pressures
Fuel is the second largest expense for airlines after labour, accounting for up to 30% of operating costs. Most European carriers hedged their fuel costs early, locking in prices for the coming months. Many US airlines, however, abandoned hedging after losses sustained during the 2008 crisis, leaving them far more exposed now.
American Airlines estimates it will face more than $4 billion in additional costs this year. IAG, which owns British Airways, forecasts a fuel cost increase of approximately €2 billion in 2026. Low-cost carriers are under particular pressure, given that their business model depends on low costs and cheap fares. Spirit Aviation Holdings collapsed in early May, with the surge in fuel prices complicating its attempt to exit bankruptcy.
Tickets are getting more expensive
Airlines are already passing a large share of their increased costs on to passengers through higher fares, fuel surcharges, and additional charges for baggage and seat selection.
In Asia, Cathay Pacific has announced new fuel surcharges of approximately $350 for long-haul international travel from mid-May. In the United States, the average return international airfare has risen 16% year-on-year to $1,101, according to the booking platform Kayak. Domestic fares have risen even more sharply — up 24% to $365.
More cancellations are coming
Airlines have already cut their summer capacity by nearly 4%, removing 9.3 million seats from their schedules, according to aviation analysis firm Cirium. Lufthansa has announced it is cancelling 20,000 unprofitable short-haul European flights this summer and is considering refuelling stopovers on some direct routes.
What are your rights if your flight is cancelled?
Consumer protections vary by country. Most airlines offer a refund, credit, or alternative flight if a booking is cancelled. Whether passengers are entitled to additional compensation depends on whether the disruption is considered within the airline’s control under local law. Airlines are exempt from paying compensation in extraordinary circumstances, which include war and extreme weather.
The European Commission has ruled that local fuel shortages qualify as an extraordinary circumstance — meaning no compensation is due. High fuel costs, however, do not. This means that if a flight within or from the EU is cancelled due to fuel costs less than 14 days before the scheduled departure, passengers may be entitled to compensation of up to €600. The same applies to passengers travelling to the EU, but only if they have booked with an EU carrier.
(information from protothema.gr)