Airlines won't face a jet fuel shortage this year, according to IATA director general Willie Walsh.
"I think that situation has been addressed," Walsh said during a press conference at the IATA Annual General Meeting on June 6 in Rio de Janeiro. "We've seen refineries around the world increase production of jet fuel to compensate for the lost production in the Middle East, which obviously was a big supplier into both Europe and Asia. So, I don't believe there's any airlines facing concerns about shortage of supplies."
Fuel industry analysts as well as International Energy Agency director Fatih Birol had given notice earlier this spring that jet fuel shortages could materialize as soon as this month in Europe and Asia if the Strait of Hormuz were to remain closed. In April, soaring fuel prices prompted Lufthansa Group to shutter regional carrier Lufthansa CityLine, which removed 20,000 short-haul flights from its schedule through October.
In a presentation prepared for its annual meeting, IATA said that shortage concerns have been assuaged by a combination of reduced demand, increases in the amount of capacity some refineries are dedicating to jet fuel, and a reshuffling of global trade patterns.
For example, the U.S., Nigeria and Spain have increased jet fuel exports, providing a partial buffer against the supply that has not been available from the Middle East, which typically provides Europe with three-quarters of its imported jet fuel.
Demand contractions for other types of fuels during the Iran war have also facilitated refinery decisions to produce more jet fuel.
But IATA warned that refineries will likely soon tip production back toward gasoline. With the summer driving season having arrived, gasoline reserves have dropped sharply in the U.S., which will push up prices at the pump if allowed to continue.
IATA expects crude oil prices to remain higher than the pre-war baseline through the end of the year, even if the Strait of Hormuz opens in July or August. If only a fragile peace holds, prices could remain elevated into 2028.