Paris: Europe may have just as little as six weeks of jet fuel left, the head of the International Energy Agency (IEA) has warned. This could mean grounding of flights during the holiday season, if the situation in the Middle East continues.
Cancellations could begin “soon” if oil remain blocked, Fatih Birol, executive director of the IEA has said, describing the situation as potentially “the largest energy crisis… ever faced”. He warned of knock-on effects that go well beyond aviation.
“The impact will be “higher (gasoline) prices, higher gas prices, high electricity prices,” he said, with the sharpest impact likely to hit countries across Asia, including Japan, South Korea, India, China, Pakistan and Bangladesh, before rippling into Europe and the Americas, as reported by timesnow.in.
All of this is due to the closure of the Strait of Hormuz due to the war between Iran and the US-Israel combine. Nearly a fifth of the world’s crude oil and liquefied natural gas passed through this narrow stretch before the crisis started.
The IEA – which advises 32 member countries on energy supply and security – in its monthly oil market report, had mentioned exports from
the Gulf region were the largest source of jet fuel to the global market. Also, refineries in other major exporting countries, such as Korea, India and China were themselves highly dependent on crude oil imports from the Middle East. Due to this, the crisis “has thrown a proverbial wrench into the inner workings of the aviation fuel markets,” it said.
A spokesperson for the UK government told the BBC that it was working with fuel suppliers to “ensure people keep moving and businesses are supported”.
“UK airlines are clear that they are currently not seeing disruption to supply,” it was further mentioned.
European countries are scrambling to replace supplies from the Gulf with imports from other places at the moment. This is coming from the US and Nigeria, analysts suggest.
There has been a rapid acceleration in US jet fuel exports in the recent weeks, the IEA has noted. Even if these shipments were all destined for Europe, they would only replace a little over half of the lost supplies, the IEA has warned.
Europe has been unable to replace more than 50% of its Middle Eastern imports. If three-quarters of supplies could be replaced, the same situation could still arise, but not until August.
Amaar Khan, who is the head of European jet fuel pricing at Argus Media, believes that even if supplies from the Gulf resume in the near future, there could be shortages in the run-up to the summer travel peak.
“It’s not a certainty, but still, it’s looking more and more likely that there will be a shortage of some extent in some areas of Europe,” he said.