International Energy Agency chief Fatih Birol cautioned on Thursday that air travel in Europe could face disruptions due to a dwindling supply of jet fuel if the Strait of Hormuz remains closed. Birol highlighted that Europe might have only around six weeks of jet fuel left, potentially leading to flight cancellations if the blockage persists. The IEA’s recent report indicated that stocks would reach a critical level in June if Europe failed to replace at least half of its jet fuel imports from the Middle East.
The IEA chief labeled the unfolding situation as “the largest energy crisis we have ever faced.” He emphasized the severity of the issue, stating that it would have significant implications for the global economy. Birol expressed concerns that prolonged closure of the Strait of Hormuz would negatively impact economic growth and inflation worldwide.
According to the IEA’s monthly oil market report, the Gulf region serves as a primary source of jet fuel for the global market. The report highlighted that refining companies in major exporting countries like Korea, India, and China heavily rely on crude oil imports from the Middle East. This disruption has disrupted the aviation fuel markets significantly, causing challenges for the industry.
The closure of the Strait of Hormuz, a crucial route for jet fuel transportation from the Gulf, has been enforced by Iran for over six weeks in response to US and Israeli actions. This closure has led to a surge in prices and concerns about potential shortages. Birol pointed out that the impact of the jet fuel shortage would disproportionately affect developing nations initially, with poorer countries in Asia, Africa, and Latin America being the first to feel the effects before it reaches Europe and the Americas.
Birol also expressed worries about Iran’s reported implementation of a “toll booth” system for ships passing through the Strait of Hormuz, cautioning about broader implications if such practices become widespread.
