Turbulence Ahead
The jet fuel shortage is starting to ripple far beyond airports
Europe has just a few weeks of jet fuel left if the current conditions persist. And this affects more than summer vacations — air travel is part of the global economic infrastructure, moving labor and supplies around the world more quickly than ever before. But with a fuel shortage looming, the systems we’ve all come to rely on are headed for severe disruption.
The current anxiety surrounding jet fuel is tied heavily to instability around the Strait of Hormuz, through which roughly one-fifth of the world’s traded oil typically passes. Until recently, hundreds of thousands of barrels of jet fuel moved through the strait each day. But since the conflict between the US, Iran, and Israel began in February, the strait has effectively been closed, choking off the flow of 25% to 30% of the world’s jet fuel supply.
The shortage is already affecting prices. In early February, before the Iran conflict disrupted energy markets, jet fuel in the United States generally cost about $2.30 per gallon. By early May, benchmark prices had roughly doubled to around $4 per gallon.
Airlines are used to fuel prices rising and falling, but this is something different.
“The industry has never seen this before, where the actual supply of the product needed to support aviation, that pipeline, is drying up,” said John Gradek, who teaches aviation management at McGill University.
Throughout the world, cracks in the aviation industry have already begun to show. Air Canada recently suspended several routes after concluding they were “no longer meeting profitability targets” amid soaring fuel costs. Spirit Airlines — long a symbol of the ultra-low-cost travel boom that reshaped American flying — recently collapsed altogether.
But even those impacts are just the beginning.
This is not the kind of disruption where planes suddenly stop flying overnight. It unfolds more gradually. First come higher ticket prices and fuel surcharges. Then airlines begin trimming less profitable routes. Travelers notice there are fewer nonstop options, fewer available seats, and longer delays when flights are canceled. Over time, those pressures spill beyond tourism and vacation travel into the broader economy as cargo capacity tightens and shipping delays grow.
“It’s a dire strait now, and it is going to have major implications for the global economy,” said Fatih Birol, executive director of the International Energy Agency. “And the longer it goes, the worse it will be for the economic growth and inflation around the world.”
The disruptions people see first
Airlines today are tightly synchronized businesses. Aircraft rotate constantly between destinations, crews are scheduled down to the hour, and many routes remain viable only so long as the economics stay highly efficient. That efficiency helped make flying cheaper and more accessible for millions of people. But it also means there is less room for disruption when conditions deteriorate.
After Spirit Airlines abruptly shut down operations, passengers across the United States found themselves stranded with few alternatives. In Fort Lauderdale, families who had booked ultra-cheap vacation flights suddenly faced last-minute replacement fares costing more than $1,000 per ticket. Some travelers slept in airports for days waiting for seats on other airlines.
Europe has already seen smaller versions of the same dynamic. KLM recently canceled more than 150 European flights as soaring fuel prices made some routes “no longer financially viable to operate,” affecting trips to cities including London and Düsseldorf. Some passengers were rebooked quickly, but others faced disrupted itineraries, extra hotel costs, and longer routes home during an already busy holiday travel period.
Once disruptions begin, they compound quickly. And analysts say the pressure is likely to fall hardest on the low-cost carriers that transformed air travel over the past two decades and that local economies increasingly rely on for both tourists and workers.
Large international carriers typically hedge fuel costs months in advance, locking in prices through long-term agreements intended to protect them from sudden swings. That does not make them immune from shortages, but it gives them time.
Many low-cost carriers operate on extremely thin margins and do not have the same cushion. If fuel becomes significantly more expensive — or harder to access consistently — airlines begin making calculations about which routes are worth keeping.
Air travel as infrastructure
In many places, particularly more isolated regions, low-cost airlines are the infrastructure on which the local economy relies. In parts of Southern Europe, for example, low-cost airlines helped turn smaller Greek and Spanish island destinations into major tourism economies by connecting them directly to travelers from across the continent. When those routes disappear — even temporarily — hotels, restaurants, seasonal workers, and local businesses can all feel the effects almost immediately.
The International Energy Agency has warned that poorer countries in Asia, Africa, and Latin America will feel this most acutely, lacking the financial buffers to compete for scarce supply. In Asia, that is already visible: airlines have canceled thousands of flights, stranding migrant workers and tourists alike, while countries like Vietnam, which imports nearly three-quarters of its aviation fuel, are racing to secure emergency supplies from wherever they can find it.
The disruption could also hit Europe’s large migrant-worker economy, which has become dependent on low-cost air travel. According to Oxfam, Europe’s agricultural sector alone employs at least 2.4 million migrant workers. Budget airlines like Ryanair and easyJet helped create a system in which workers from Eastern Europe regularly fly to jobs in agriculture, construction, hospitality, and tourism across Western Europe — sometimes for seasonal work lasting months, sometimes for shorter rotations.
A system built for efficiency, not shocks
Disruptions in passenger air travel are only part of the story. A significant amount of global cargo travels underneath ordinary passenger flights — everything from pharmaceuticals and medical equipment to Apple products, airplane parts, and highly perishable items. That means disruptions in passenger air travel can quickly reverberate in wider ways.
For decades, global markets operated on the assumption that the flow of energy and fuel around the world — even amid wars, sanctions, and regional crises — would remain fundamentally intact. That assumption shaped the architecture of globalization itself.
Airlines expanded route networks around predictable fuel access. Supply chains became increasingly dependent on rapid air cargo. Today, air freight moves goods worth more than $8 trillion annually — roughly one-third of global trade by value, according to the International Air Transport Association. And much of that cargo does not travel on dedicated freight planes. Before the pandemic, nearly 80 percent of global air cargo moved in the belly holds of ordinary passenger flights.
What comes next
As the ripple effects of the shortage continue to grow, some governments around the world have already begun to act.
The European Commission has begun emergency coordination with member states and is now assessing whether to introduce mandatory minimum jet fuel reserves. The EU is also investigating alternative jet fuel imports from the United States. The United States, which has no equivalent strategic reserve for aviation fuel, has responded primarily through military and diplomatic channels, pressing to reopen the Strait of Hormuz.
But even an immediate resolution may not bring quick relief. Matt Smith, director of commodity research at Kpler, described the unfolding shortage as a “slow-motion car crash.” He warned that even if the strait fully reopens, supply chains will not normalize until at least July, “and even that,” he said, “may be optimistic at this point.”
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