How the Middle East conflict is fueling problems for aviation

The constraints stem from the ongoing Middle East conflict, which has had a material impact on the availability – and price – of jet fuel, specifically fuel-type ‘Jet A-1’. The industry has acknowledged that shortages of Jet A-1 could follow in the coming weeks unless the conflict ends soon.

• Read more: What the Middle East conflict means for your business

Below, we look at the supply issues in more detail and examine the actions airlines need to be considering now before the problems get worse.

The jet fuel crisis explained

Jet fuel is a highly refined form of kerosene refined from crude oil. While Jet A-1 is the global standard jet fuel type used in most international operations, ‘Jet A’ is commonly refined and used in North America. One of the main differences between the two is that Jet A has a higher freezing point.

In recent weeks, the price of crude oil – and products derived from it, like jet fuel – has soared. The high prices reflect constraints on supply arising from the Middle East conflict and, in particular, the resultant de facto closure of the Strait of Hormuz, a narrow sea passage in the region. According to the International Energy Agency (IEA), an average 20 million barrels of crude oil and oil products were shipped via the strait in 2025 – which amounts to around 25% of the world’s seaborne oil trade.

The closure of the strait has led to soaring prices for oil and oil products as countries dependent on the import of those products scramble to secure supply. For example, crude benchmark prices are lower than prices being paid for actual cargoes of the product, at a time when stock levels in the Middle East have been dropping to record lows.

The problem of a shortage of supply of Jet A-1 is particularly acute in Europe and Asia. The International Energy Agency (IEA) last month highlighted (67-page / 3MB PDF) that around 75% of Europe’s net jet fuel imports comes from the Middle East.

Over the past 10 weeks or so, Europe and Asia’s supplies have been diminishing, as shipments that had made it out of the Strait of Hormuz before the conflict began, and domestic and foreign stockpiles that had been built up, are used.

Many ships that would otherwise transit through the Strait of Hormuz have re-routed round the Cape of Good Hope in order to reach Europe. However, the additional sailing time has led to delays in supply reaching customers and added to their fuel costs too. Last week, Maersk chief executive Vincent Clerc described the cost impact as “unprecedented”, highlighting that it is adding $500 million a month to the company’s costs.

While countries such as the US and Nigeria have ramped up exports, other challenges have arisen.

For example, even if supplies of crude oil make it to Europe, there is limited capacity for European refineries to process more of it than they do currently to make it into jet fuel. In addition, the higher prices for crude oil and oil products, which are generally traded in US dollars, has also been exaggerated for non-US buyers owing to the strengthening of the dollar relative to other currencies at the start of the conflict – though those pressures have since eased a little.

The IEA has mapped out one scenario where “physical shortages” of jet fuel, “flight cancellations” and “demand destruction” could arise from June, even before summer season demand for fights hits its peak. The International Air Transport Association (IATA), which represents global airlines, described the IEA’s assessment of the potential shortages as “sobering” and said that by its own estimations, a lack of jet fuel could account for flight cancellations in Europe by the end of May.

That warning was repeated by late last week by Stuart Fox, director for flight and technical operations at IATA, who called for “flexibility” so that the airline industry can make best use of the available supply of jet fuel. In that context, Fox highlighted how guidance has been issued to industry to enable European airlines to safely switch to using Jet A instead of Jet A-1.

Fox said: “For fuel suppliers and airports, it may mean implementing a structured management-of-change process to introduce a different fuel grade safely, including updating procedures, clear labelling, communication, and quality control measures. Outside of operations some other adaptations may be needed. Fuel supply contracts specifying Jet A-1 only may need to be reviewed. Insurance coverage and documentation may require updates. And, as always, clear communication is critical, flight crews must know exactly what fuel is onboard, using established operational channels. None of this is particularly complex. But it does require coordination across the entire fuel supply chain.”

The commercial impact of high jet fuel prices is already being felt.

While global air passenger numbers rose in March, despite the conflict, IATA’s director general Willie Walsh conceded that rising ticket prices, which reflect the high cost of jet fuel, “could start to shift passenger behaviour”. Some airlines have been adding fuel price surcharges onto passenger fares.

The full impact of the jet fuel crisis could lag, however, owing to the fact that many airlines have hedged a significant portion of their fuel requirements for the coming months, meaning they have secured supply on long-term contracts at prices that reflected the market norm before the conflict began. This means the impact of higher prices will not be felt immediately. Similarly, airlines have hedged against their exposure to a strong dollar, which jet fuel is typically traded in.

German airline Lufthansa has warned that the company’s financial performance could be impacted by “exchange rate sensitivity” linked to the purchase of kerosene. International Consolidated Airlines Group (IAG) expects to pay around €9 billion for fuel in 2026 – a figure it expects to hit profits. The company plans to increase fares to mitigate some of the fuel price increase. In response to the higher costs, Air France-KLM said it is pausing hiring and cutting discretionary spending such as employee travel.

Actions for airlines

As Stuart Fox has warned, without an imminent resolution of the conflict in the Middle East, there will soon be jet fuel shortages. This would exacerbate existing cost pressures and result in flight cancellations – in the UK, for example, the government has already given the airline industry scope to consolidate services in the event shortages materialise, to ensure efficient use of available jet fuel supply.

A prolonged fuel crisis would not only impact on the summer holiday season: it could begin to impact on air freight, and, with that, have a much broader economic impact.

For airlines, it is important they consider their own exposure to a supply shortage and higher prices, including by calculating future losses and future hedges against possible scenarios that could play out. They should further review their current contracts and examine where they may need updated.

Every business in the jet fuel supply chain is likely to feel the impacts of a market where costs have surged. A degree of pragmatism is advisable in engaging with suppliers – as it will not be in the interests of airlines to pressure their contractual counterparties into accepting costs and risks that make their operations unviable or in enforcing existing terms that would put the supplier into financial difficulty and, in turn, threaten the security of their supply.