Europe has six weeks’ supply of jet fuel left, energy boss warns

Europe only has six weeks’ supply of jet fuel because of the Middle East conflict, the head of the world’s energy watchdog has warned.

Fatih Birol, executive director of the International Energy Agency (IEA), warned there could be flight cancellations “soon” if oil supplies remain restricted by the Iran war.

Iran continues to have a stranglehold on tankers passing through the Strait of Hormuz.

Mr Birol told the Association Press this is causing “the largest energy crisis we have ever faced”.

He said Asian counties such as Japan, India and China that rely on energy from the Middle East are on “the front line”, but pressure will then “come to Europe and the Americas”.

Europe has “maybe six weeks or so (of) jet fuel left”, he warned.

If the Strait of Hormuz is not reopened, the impact on Europe may be that “some of the flights from city A to city B might be cancelled as a result of lack of jet fuel”, he added.

Earlier on Thursday, easyJet chief executive Kenton Jarvis said all the airports it serves are “operating as normal”.

He went on: “We only ever in this industry have three to four weeks visibility (of jet fuel supplies), and that is the same as it was pre-crisis.

“We have visibility to the middle of May, and we have no concerns.

“What we’re seeing is airports and fuel suppliers working well to bring jet fuel to the airports.”

EasyJet reported that the conflict in the Middle East cost it about £25 million in higher jet fuel prices last month.

The Luton-based airline said it expects to report a headline loss before tax of between £540 million and £560 million for the six months to the end of March.

The war has introduced “near-term uncertainty around fuel costs and customer demand”, easyJet reported.

Bookings are down two percentage points for the three months to the end of both June and September compared with a year ago.

The warning over bigger-than-expected first half losses saw shares in easyJet fall as much as 9% in early trading on Thursday, before settling about 4% lower.

Mr Jarvis, easyJet chief executive, said: “Our H1 financial performance worsened year on year, impacted by the conflict in the Middle East and the competitive environment in some markets.

“Following our busiest Easter holiday period ever, the operational ramp up into peak summer continues as planned.

“EasyJet’s financial strength from our investment grade balance sheet and £4.7 billion of liquidity mean we are well placed to navigate current geopolitical challenges while remaining focused on our medium term targets.”

Dan Coatsworth, head of markets at AJ Bell, said while the Middle East war is putting pressure on easyJet, it is “in good financial shape to withstand another period of disruption”.

He said the airline is “well-versed in dealing with setbacks given past experiences with air traffic control strikes and the stop-start pandemic backdrop”.

He added: “So much depends on what happens next with the Middle East crisis.

“A swift resolution could remove cost pressures and trigger a flurry of bookings.

“A prolonged crisis could see demand dwindle further and a succession of cancellations if fuel supplies run dry or are rationed in various parts of the world.”

A Government spokesperson said: “We continue to engage with British airlines to support their operations against the backdrop of war in the Middle East, and to limit the impact on passengers.

“Most airlines purchase their aviation fuel in advance to offset price fluctuations, however we are aware of the impact to businesses, and are working with international allies to see a reopening of the Strait as soon as possible.”