Jet Fuel Shortage To Drag On For Months Even After Iran-US Truce: IATA

Global jet fuel markets are unlikely to stabilise anytime soon despite the partial reopening of the Strait of Hormuz, with the International Air Transport Association warning that supply disruptions from the Middle East conflict could take months—not weeks—to ease.

Recovery to be delayed despite ceasefire

Even as the US-Iran ceasefire has improved sentiment and raised hopes of normalised oil flows, the bigger challenge lies in damaged refining capacity across the region.

IATA Director General Willie Walsh said it would take “months” for jet fuel supply to return to required levels, highlighting that the recovery process will be gradual rather than immediate.

Crude supply resumption not enough

The reopening of the Strait of Hormuz has led to a sharp drop in oil prices, but experts caution that restoring crude flows alone

will not resolve the issue.

Walsh noted that even if crude supply resumes, disruptions in refining infrastructure will continue to constrain jet fuel availability for some time.

Airfares likely to rise

Jet fuel is the second-largest cost component for airlines after labour, accounting for nearly 27% of operating expenses. With fuel prices having surged sharply during the conflict—outpacing crude oil—airlines are expected to pass on the higher costs to passengers.

Walsh said fare increases are “inevitable” as carriers adjust to the elevated cost environment.

Airlines grappling with operational disruptions

The conflict has significantly disrupted global aviation networks. Airlines have been forced to reroute flights, carry additional fuel, and cut services across affected regions.

While some international carriers have stepped in to absorb displaced demand, the gap left by Gulf carriers remains difficult to fill, according to Walsh.

Not a COVID-like crisis

Despite the severity of the situation, industry leaders stress that the current disruption is not comparable to the pandemic.

Walsh pointed out that past crises such as the post-9/11 slowdown took about four months for recovery, while the 2008–09 financial crisis required up to a year—suggesting a prolonged but manageable recovery path.

Alternative refining hubs may help

Refineries outside the Middle East, particularly in countries like India and Nigeria, could gradually help ease supply constraints once crude flows normalise.

However, Walsh cautioned that this process will take time before it translates into meaningful relief for global markets.

Outlook: Slow and uneven normalisation

While the ceasefire provides a pathway to recovery, the jet fuel market is expected to remain under pressure due to structural bottlenecks in refining capacity.

For airlines and travellers, this means higher fares, constrained capacity, and continued volatility are likely to persist well beyond the immediate easing of geopolitical tensions.