The International Energy Agency’s (IEA) executive director, Fatih Birol, warned on Thursday that Europe faces a critical shortage of jet fuel, potentially lasting only six weeks, which could lead to widespread flight cancellations. Speaking in an interview with the Associated Press, Birol attributed this dire situation to the current conflict in Iran, which has disrupted commodity movements through the Strait of Hormuz, consequently igniting “the largest energy crisis in history.”
Birol cautioned that the period of heightened prices for gasoline, diesel, and jet fuel is likely to persist, as prospects for a ceasefire agreement between the US and Iran, along with the reopening of the key shipping route, remain bleak. He claimed that this crisis would significantly impact the global economy. “The longer this crisis lasts, the more detrimental it will become for global growth and inflation,” he stated.
In the United States, fuel prices have surged considerably, with gasoline exceeding $4 per gallon and diesel climbing above $5.60. Notably, jet fuel pricing in major cities such as New York, Chicago, Houston, and Los Angeles has escalated from $2.50 to $4.69 per gallon within a short period following the onset of the conflict.
While the US has some protection from the interruptions in Middle Eastern supplies—largely due to its imports of oil from Canada and Mexico and its domestic production capabilities—Europe is much more dependent on crude oil and liquefied natural gas (LNG) from the region. Additionally, European countries rely significantly on refined products from India, although these are contingent on stable crude oil deliveries from the Middle East.
Since the conflict began, the volume of imports into Europe has dropped sharply, leading to a significant jet fuel shortage. Birol suggested that the resulting pressure could compel airlines to start cancelling flights in response to dwindling fuel supplies. Furthermore, he expressed concern for poorer developing nations that depend heavily on imported energy, predicting that they will experience even worse economic repercussions.
Despite varying impacts across different regions, Birol affirmed that the ramifications of this unprecedented energy supply shock will be felt globally. “Everyone will suffer in some way,” he noted. “While some nations may have greater resources than others, no country will escape the fallout of this crisis.”
