If you were planning to buy a plane ticket, we have a warning: it is better that you do it as soon as possible.
That’s what the price of jet fuel indicates. The cost of oil for this type of use has skyrocketed since a new war broke out in the Middle East. Following the US and Israeli attacks and Iran’s response, the supply chain has become so stressed and strained that it does not bode well for the future.
2$25.44. It is the figure that has set the record and that tells us about the nervousness that is beginning to be experienced with the supply of fuel for airplanes. Those $225.44 was the price that barrels of jet fuel reached last Wednesday in Asia, they point out in Reuters.
That figure was an anomaly that ended up rebounding but it gives an idea of how the market is working. “It’s absolute chaos,” June Goh, an oil market analyst at commodities company Sparta, told Reuters. Financial Times. “We never expected that jet fuel could be twice the price of crude oil,” he explained.
years ago. Specifically, four. Since 2022, the price of jet fuel has not been so expensive in the case of Europe and two years if we talk about Asia and the United States. The problem is not so much that “equality” in price. The problem is that it seems that we have already put on the tie and now it is time to tighten the knot.
Because it is calculated that 40% of jet fuel that reaches Europe does so through the Strait of Hormuz, currently collapsed between vessels seeking to avoid an enclave over which missiles, drones and fighters fly over in search of targets to bomb.
Why is this happening? Jet fuel is more delicate than fuel intended for passenger cars, so it can only be processed in refineries. Europe has reduced its refineries in recent years, something that It already affected the rise in diesel prices in the early stages of the Ukrainian War. And Asian refiners are seeing crude oil supplies disrupted by fighting in Iran and nearby countries. In Saudi Arabia, some refineries have had to suspend operations due to the attacks, according to Barron’s.
From China, furthermore, They are already limiting fuel exports outside the country to prioritize the internal market. And it is calculated that 13% of the oil that China buys abroad comes from Iran. That is to say, there is less oil reaching the refineries and some oil companies are considering taking enormous detours to avoid the dangers of Hormuz.
Right now, it’s not just that oil is having more trouble getting there. The thing is there are deposits closing because there are no means to transport them to the refineries. In OilPrice They point out that Iran has already had to stop deposits because there is no outlet for its production. And Kuwait could be the next to enter the same situation, according to Financial Times. And most of the oil to be refined in Europe comes from Kuwait.
And dwarf tanks. Another pressing problem is that the tanks that hold airplane fuel are small because they require very specific conditions, according to Goh of Sparta. This causes the need for replacement to be high and, therefore, the price of fuel affects this market more.
Therefore, the perfect storm is forming. There is oil that does not leave the fields, countries limiting exports, companies looking for solutions to save the Strait of Hormuz and a storage space sensitive to any break in the supply chain.
There are already notices. To all of the above we must add that part of this fuel is staying in the Middle East to try to provide service to all the planes that are looking for a space to take off from airports that, right now, are chaos. According to Financial Timesqueues to refuel are causing delays and some companies are choosing to refuel before reaching their destination so as not to do so in the busiest places.
The most affected in Europe, everything indicates, will be the low-cost companies, which are the ones that play the hardest with their profit margins. In Bloomberg They report that WizzAir already points out that this increase in prices will make it lose 50 million euros. This means that in their forecasts for 2026 they would go from earning 25 million euros at the end of the year to losing it.
Photo | Nicholas Susilo
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