Accelerated refinery closures over the past decade and increased dependence on kerosene from the Middle East have once again exposed the vulnerability of Europe’s energy supply.
For years, European consumers have had to deal with last-minute strikes by ground staff and cabin crew during the peak summer travel season. This year, the strikes may be seen as a minor nuisance compared to what lies ahead in a few weeks: a jet fuel supply crisis that could ground flights and raise fares.
The war in Iran has cut off most European imports of jet fuel, while local production has been falling for almost two decades due to the permanent closure of dozens of refineries or their conversion to biofuel production.
The war in Iran and the closure of the Strait of Hormuz have severely limited jet fuel supplies in Europe, while jet fuel prices have soared to more than $200 per barrel. The last imports from the Middle East have arrived on tankers that had passed through Hormuz before the war began, and there is only one alternative to supply jet fuel: the United States. These supplies are not only insufficient to replace lost jet fuel from the Middle East. Europe faces increasingly fierce competition from Asia for these cargoes as the crisis hit Asia first with Middle East crude supplies collapsing, Asian refiners cutting their refinery operations and countries imposing fuel export restrictions to preserve domestic supply.
Related: Oil drops, but the real test comes this weekend
In 2009 there were nearly 100 refineries in operation in Europe. Of them, 28 refineries (more than 25% of the number of refineries and 16% of refining capacity) have been closed or transformed since 2009, according to data from the European Fuel Manufacturers Association.
As refineries have closed due to declining fuel demand in Europe and emissions reduction policies, Europe’s dependence on imported supplies has increased. The hit to supplies from the Middle East caught Europe off guard regarding energy supply security for the second time in just four years, after natural gas shipments from Russia plummeted in 2022.
This time, the jet fuel crisis could be imminent, analysts and forecasters warn.
Last year, Europe imported about a third of the jet fuel it consumed, with 75% of imports coming from the Middle East, according to the International Energy Agency (IEA).
Its chief executive, Fatih Birol, warned this week that Europe has “maybe six weeks or so” of remaining jet fuel supply.
“If we are not able to open the Strait of Hormuz… I can tell you that we will soon hear the news that some of the flights from city A to city B could be canceled as a result of a lack of jet fuel,” Birol told the Associated Press in an interview.