The International Air Transport Association (IATA) has warned that global jet fuel supplies are unlikely to return to normal for several months, even if the Strait of Hormuz reopens to shipping. Director General Willie Walsh said the disruption to refining capacity in the Middle East means supply chains will take time to recover, despite expectations of a fall in crude oil prices.
Fuel is the second-largest cost for airlines after labour, typically making up around 27% of operating expenses. Walsh told reporters in Singapore that while crude prices may drop, jet fuel costs are likely to remain elevated in the near term due to the damage to regional refineries.
Iran’s closure of the Strait of Hormuz, part of its military response in the ongoing conflict, has severely restricted the flow of jet fuel worldwide. The announcement of a two-week ceasefire by US President Donald Trump, conditional on safe passage through the strait, briefly lifted airline stocks and pushed oil prices below $100 a barrel.
Walsh cautioned against comparing the current situation to the COVID-19 pandemic, which saw global air capacity fall by as much as 95% due to border closures. He said the present disruption was more akin to the downturns of 2008–09 or the aftermath of the September 11 attacks, with recovery likely to take several months.
Airlines have already begun adjusting operations, cutting flights, carrying extra fuel from home bases, and adding refuelling stops to cope with the squeeze on supplies. IATA’s assessment suggests the industry faces a sustained period of higher fuel costs and logistical challenges as it works to rebuild normal service levels.
