‘Critically low levels’: UK braces for jet fuel shortage as rationing looms
The UK is particularly vulnerable to the jet fuel shortages caused by the Iran war, as the risk of rationing looms as supplies fall to “critically low levels” while the summer holidays creep closer.
The ongoing closure of the Strait of Hormuz has led to an “extreme tightness” in the supply of jet fuel in Europe, with the UK the “most exposed” because of low stocks, its high reliance on imports and poor refining capacity, according to a research note from Goldman Sachs.
The Gulf region produces around one fifth of the fuel traded on international markets, with Europe one of its significant customers, but the closure of the strait has choked up the global oil supply, leaving airlines forced to battle for fuel produced elsewhere, hiking prices.
The price of jet fuel has doubled since the start of the conflict on 28 February, while airlines have been forced to cut roughly two million seats from their schedules for this month within the past two weeks.
In the research note, Goldman Sachs said: “The UK is the largest net importer of jet fuel in Europe, and it holds no strategic reserves, leaving commercial inventories as the primary buffer.
“As a result, inventories in some countries, especially the UK, could fall to critically low levels, increasing the likelihood of rationing measures.”
Airlines forced to act
The sharp rise in jet fuel has left airlines forced to act to offset the additional costs, with some cancelling or consolidating flights while others have pushed up ticket costs.
IAG, the owner of British Airways, has previously said it will raise ticket prices to reflect higher fuel costs, admitting it was “not immune” to the fuel volatility.
Air France said it expects a $2.4bn (£1.7bn) increase in its jet fuel bill this year, while American Airlines expects its bill to increase by more than $4bn.
Meanwhile Micheal O’Leary, boss of Europe’s biggest airline Ryanair, told The Times that rivals were “desperately” searching for flights to cancel.
But budget airline Wizz Air has looked to reassure passengers that its summer schedule will run as planned, saying its operations remain “fully stable and unaffected” despite a potential shortage.
Issuing guidance
On Monday, the European Commission said it would issue guidance on jet fuel for airlines later this week.
Anna-Kaisa Itkonen, the commission spokeswoman, said: “I don’t think anyone knows how long this situation will last, so the best we can do and the most effective thing that we can do and that we are doing is to prepare for all eventualities.”
The UK government is preparing for possible disruption with transport secretary, Heidi Alexander, expected to warn that cancellations could hit summer holidays, with ministers drawing up contingency plans.
The plans would allow airlines to consolidate flights and adjust schedules to manage the shortage.
But Starmer warned last week that people may have to change “where they go on holiday”.
Goldman Sachs analysts also noted the UK’s reduced capacity to refine jet fuel.
The UK’s lack of ability to do so follows the closure of Scotland’s only oil refinery, Grangemouth, in April 2025, with concerns on the future of the Prax Lindsey oil refinery in North Lincolnshire.