Europe Has Six Weeks of Jet Fuel Left, IEA Warns as KLM Cuts 160 Flights
The IEA warned Europe has roughly six weeks of jet fuel left as the Strait of Hormuz remains closed, with KLM already cutting 160 flights and further cancellations expected across the continent.
Europe has roughly six weeks of jet fuel reserves remaining, the International Energy Agency has warned, as the closure of the Strait of Hormuz drives up kerosine prices to levels that are making short-haul flights unprofitable. KLM announced on Thursday that it will cancel 160 flights from 27 April, and the airline industry is bracing for more cuts as the summer travel season approaches.
Rentals in the Netherlands
Signaal tracks the Dutch rental market and notifies you the moment something matches your search. Be first to apply.
The IEA warning
IEA Executive Director Fatih Birol told the Associated Press in an interview from his Paris office that Europe has "maybe six weeks or so of jet fuel left", warning of possible flight cancellations "soon" if oil supplies remain blocked. He described the situation as "the largest energy crisis we have ever faced."
The IEA told CNBC that "several European countries may start to face shortages of jet fuel in the next six weeks, depending on how much they are able to import from international markets to replace the lost supply from the Middle East, which accounted for 75 percent of Europe's net imports of jet fuel previously."
Birol warned that if the Strait of Hormuz is not reopened, "I can tell you soon we will hear the news that some of the flights from city A to city B might be cancelled as a result of lack of jet fuel."
KLM cuts flights, other carriers also affected
KLM said it will cancel 160 flights from Schiphol over the coming month, representing less than one percent of its European routes. The cancellations take effect from 27 April and affect routes including London and Düsseldorf, where the airline operates multiple daily flights. KLM says it does not currently face a kerosine shortage; the issue is one of cost, not availability.
KLM has also introduced a fuel surcharge of 100 euros per return ticket on long-haul economy flights, or 70 euros on routes to Canada, Mexico and the United States.
KLM is not alone. Lufthansa has grounded 27 aircraft operated by feeder airline CityLine and is finding alternative roles for two thousand staff. SAS has already cancelled one thousand flights, and Ryanair is also monitoring the situation around the Strait of Hormuz with concern. According to ING sector economist Rico Luman, the picture will deteriorate further. "Kerosine stocks are declining. If new deliveries do not arrive to replace them, there will be a problem," he said.
The Dutch position: relatively better, but not safe
The consequences of the war are already visible in the large kerosine storage facilities in the ports of Amsterdam, Rotterdam and Antwerp, the so-called ARA region. Since the beginning of March, stocks there have fallen by around a quarter. "That is a much faster rate of decline than normal," said Patrick Kulsen, director of market research firm Insights Global.
The Netherlands is in a relatively more comfortable position than many other European countries. The country has refineries in Rotterdam that can produce jet fuel domestically, and fuel can be delivered directly to Schiphol via pipeline. However, aviation industry association BARIN chair Marnix Fruitema described the broader European picture as "reasonably adequate for now", stopping well short of reassurance.
Part of the pressure on European stocks comes from an unexpected direction: Asian buyers are outbidding European customers. "Prices in Asia are around 25 percent higher than here," said ING economist Rico Luman. "A lot of kerosine is being sold from here to Asian parties, and that is contributing to the tightening shortage."
The EU response
The European Union is drafting emergency plans to tackle the supply crunch. From next month, the European Commission plans to introduce EU-wide mapping of refining capacity and measures to ensure existing refinery capacity is fully used. The IEA has already released 400 million barrels of oil from member states' emergency reserves, though analysts say this will take until the end of the year to reach markets in meaningful volumes.
Cornell University professor Christopher Anderson said travellers should prepare for more than just higher airfares. "This is no longer just a fuel-price story," he said.
