Attempting to replace the jet fuel supply lost due to the Strait of Hormuz closure, Europe has turned to purchases from the U.S. market.
Still, Europe is at risk of a supply shortage as soon as June, according to an analysis by financial services group Societe Generale.
Europe's jet fuel usage of 1.6 million barrels per day is mostly met by its own production of 1.1 million barrels. Of the other 500,000 barrels per day, up to three-quarters is historically sourced from the Middle East, says Societe Generale.
With the Strait of Hormuz closed, reserve jet fuel stocks are already at their lowest in five years at the Amsterdam-Rotterdam-Antwerp (ARA) hub, which is the primary location for European oil refining and storage.
"Given the ARA's central role in feeding Northwest Europe via pipelines and Rhine barges, this rapid drawdown signals a tightening system with little remaining buffer," reads the Societe Generale analysis, which was led by the company's head of commodity research, Mike Haigh.
Typically, the U.S. exports between 30,000 and 60,000 barrels of jet fuel per day to Europe. The U.S. is now exporting approximately 200,000 barrels of jet fuel per day to Europe. Still, Europe's imported jet fuel supply remains down approximately 175,000 barrels per day, which amounts to 53% of its lost Middle East supply.
Societe Generale estimates that if supplies remain around that level -- the most likely scenario should the Strait of Hormuz remain closed --European airlines will be faced with fuel shortages as soon as June.
If Europe can replace 75% of the missing fuel supply, shortages would materialize by August. Replacing 90% of Middle East supply would likely leave summer operations intact.
In an interview with CNBC's Squawk Box Europe on Monday, Benedict George, head of European product pricing for energy market intelligence company Argus, said that fuel shortages wouldn't lead to a chaotic cancellation of flights.
Instead, airlines would anticipate the situation and make cancellations ahead of time. He noted that such action has already taken place, including Lufthansa's cancellation of 20,000 short-haul flights through October.
He said that Europe's shortage compared to its usual jet fuel supply could be around 8% in the coming months, leading to a similar percentage of flight cancellations.
Jet fuel supply is also a stress point in Australia, New Zealand, Asia and portions of Africa, Societe Generale said. If global reserves continue drawing down, bidding wars will escalate, raising jet fuel cost for the airlines that can obtain the adequate supply, and forcing schedule cuts for those that cannot.
The analysis notes that many European airlines, unlike American carriers, are heavily invested in fuel hedges, which provide substantial protection from escalating jet fuel costs.
"The far greater risk is physical scarcity," says the analysis. "Canceled flights due to unavailable fuel would represent a very different and far more disruptive outcome, particularly as rebuilding jet fuel inventories would extend well into peak summer demand and beyond even if Hormuz reopened."