EU Commissioner Warns of Potential Jet Fuel Supply Issues in Longer Term

The European Union’s energy commissioner said on May 13 that while there isn’t a risk to the supply of jet fuel now, there are no guarantees the bloc won’t face shortages in the longer term.

Commissioner Dan Jorgensen told reporters that the outcome depends on the situation in the Middle East.

“We don’t expect a very serious security of supply issue on very short term,” Jorgensen said on the sidelines of the EU’s informal meeting of energy ministers. “But we cannot exclude that there will be security of supply issues on a longer term.”

The price of jet fuel has increased in some markets since the United States and Israel launched a war on Iran and Tehran imposed an effective blockade on the Strait of Hormuz, a vital route for global oil shipments.

He also said that it depends on how airlines react.

“We’ve already seen airline companies canceling flights, many flights even, but we continue to monitor the situation,” Jorgensen said.

Jet fuel is one of the airline industry’s biggest expenses, typically accounting for about 25 percent to 30 percent of operating costs.

Airlines Raise Prices, Cut Services

In the past few weeks, carriers around the world have announced cuts to flight schedules and price increases.

Last month, major German airline Lufthansa said it was cutting 20,000 short-haul flights from its summer scheduling because of the rising cost of jet fuel, which it said had “doubled since the outbreak of the Iran conflict.”

American Airlines said in April that it would raise checked baggage fees and tighten some economy class benefits as part of the carrier’s “continuing evaluation of pricing in light of the current operating environment.”

Delta Air Lines, JetBlue, Southwest Airlines, and United Airlines had also similarly raised fees in response to the surge in fuel costs.

The head of a body representing global airlines has said it will take months for jet fuel supplies to recover.

Willie Walsh, director general of the International Air Transport Association, told reporters in Singapore on April 8 that if the Strait of Hormuz “were to reopen and remain open, I think it will still take a period of months to get back to where supply ​needs to be, given the disruption to the refining capacity in the Middle East.”

Owen Evans contributed to this report.