IATA Warns Jet Fuel Supply Recovery Could Take Months Even if Hormuz Reopens
The International Air Transport Association has warned that global jet fuel supply disruptions could persist for months, even if the Strait of Hormuz reopens, due to ongoing constraints in refining capacity across the Middle East.
Refining Bottlenecks to Delay Recovery
Speaking in Singapore, IATA Director General Willie Walsh emphasized that the issue extends beyond crude oil flows, pointing to significant disruptions in regional refining operations.
Even if crude shipments resume, experts expect:
- Gradual recovery of jet fuel production
- Continued supply tightness
- Elevated fuel prices in the short term
Airlines Face Growing Cost Pressure
Fuel remains the second-largest cost item for airlines after labor, accounting for approximately 27% of total operating expenses.
Recent developments have led to:
- Sharp increases in jet fuel prices
- Intensified financial pressure on carriers
- Adjustments in operational planning and capacity deployment
Operational Adjustments Underway
To cope with supply constraints, airlines are implementing a range of measures, including:
- Flight reductions on certain routes
- Carrying additional fuel from origin airports (tankering)
- Adding refuelling stops to ensure operational continuity
Markets React to Ceasefire Hopes
News of a potential ceasefire and the reopening of the Strait of Hormuz triggered a drop in oil prices and a surge in airline stocks across global markets.
Airline shares in Asia and Europe recorded strong gains, reflecting renewed investor confidence tied to easing supply concerns.
Gulf Carrier Capacity Impact Seen as Temporary
According to IATA, Gulf-based airlines—accounting for roughly 15% of global international capacity—may face short-term disruptions.
However:
- Some capacity may be partially offset by non-regional carriers
- Full replacement of Gulf carrier capacity is unlikely
- A relatively quick recovery of Gulf hubs is expected
Crisis Comparable to Past Market Shocks
Industry experts suggest the current situation is not comparable to the COVID-19 crisis but rather resembles past disruptions such as:
- The post-9/11 aviation downturn
- The 2008–2009 financial crisis
Recovery timelines in such cases typically ranged from a few months to about a year.
Alternative Supply Sources Could Ease Pressure
To mitigate supply shortages, refining capacity in countries such as India and Nigeria could play a key role. Additionally, exports from major refining hubs in Asia may help stabilize the market once crude flows normalize.
