US-Iran War Escalates Again, European Skies Face Paralysis First

The European aviation industry is facing a new threat amid the re-escalation of conflict in the Middle East. Despite increasing jet fuel imports from the United States and Asia, boosting domestic refinery production, and drawing down reserves, Europe is still considered the region most vulnerable to supply disruptions if tensions worsen. Analysts assess that Europe’s position is far more fragile than other regions because many oil refineries have been closed over the decades. As a result, the region has become heavily dependent on jet fuel supplies from the Middle East shipped through the Strait of Hormuz. The United Kingdom, France, and Germany are cited as the countries most vulnerable to potential disruptions. The Strait of Hormuz, which before the war handled about a fifth of the world’s seaborne oil and liquefied natural gas shipments, was partially reopened last June after the war triggered by US and Israeli airstrikes on Iran in late February. However, in July, the fragile ceasefire was again on the brink following tit-for-tat attacks between the two sides. Data from consultancy Energy Aspects as of 18 June shows Europe is expected to experience a jet fuel supply deficit of nearly 600,000 barrels per day in the third quarter of this year. In contrast, the United States is projected to enjoy a surplus of 116,000 barrels per day, while the Asia Pacific region records a surplus of around 425,000 barrels per day. Energy Aspects also noted that European jet fuel inventories stood at only 38 million barrels in early June, far below US stocks of 99 million barrels. Based on Reuters calculations, this means Europe has only enough reserves to meet demand for less than 30 days, making it the jet fuel market with the tightest reserves among the world’s major regions. Latest data from the International Energy Agency also shows jet fuel stocks at the end of May were up about 10% compared to last year, while refinery production rose 30%. However, this figure still indicates a reserve cushion of only about one month. Rystad Energy analyst Janiv Shah expects supply pressures to continue. The European Commission also acknowledged the situation could worsen if the Middle East conflict escalates further. EU Energy Commissioner Dan Jorgensen said in June that the bloc could face increasingly tight jet fuel stocks towards the end of the summer holiday season. He said Brussels is ready to coordinate the release of national reserves if necessary to maintain smooth supply. Before the war broke out in late February, about half of Europe’s jet fuel imports came from the Middle East. Europe is trying to avert a supply crisis by seeking new suppliers, including Canada. Kpler data shows European jet fuel imports in June reached 673,000 barrels per day, the highest since October 2025. The US and Nigeria were the largest exporters to Europe during that period. In addition, Kuwait, Canada, India, and South Korea also shipped jet fuel cargoes to the region. Imports from India in June even reached their highest level since February. Meanwhile, about 25,000 barrels per day of jet fuel from Kuwait is scheduled to arrive in Europe in August via a ship-to-ship transfer using the vessel Proteus Harvonne. The shipment is the first since early March after supply flows had previously halted. Before the conflict disrupted distribution, Kuwait was one of the main jet fuel suppliers to Europe. In addition to seeking new supply sources, several European countries are also increasing domestic production. In Italy, oil refineries boosted jet fuel production by about 10% during the first four months of this year. According to Italian fuel producers’ association UNEM, the country’s imports actually fell by about 6%, allowing domestic production to meet nearly 70% of national demand in March and April. Industry sources said Italian energy company Eni, which controls about half of the country’s jet fuel production capacity, increased output by importing semi-finished products from outside Europe for further processing. Amid efforts to maintain supply, jet fuel prices in Northwest Europe have begun to decline. Prices are now around US$133.27 per barrel, down from a record US$215.32 per barrel reached in late March. The price drop helps reduce cost pressures for airlines, given that fuel typically accounts for about 20% to 25% of total operating costs. However, analysts predict this will not immediately lead to lower ticket prices. Demand for air travel remains very high, while flight capacity is still limited after many airlines previously cut flights to save fuel.