A potential jet fuel shortage across Europe could lead European Union member countries to share fuel reserves and import more from the U.S.
Jet fuel prices have more than doubled since the start of the war in Iran, with oil prices accelerating after the restriction of traffic through the vital Strait of Hormuz, the chokepoint where 20 percent of global oil supply passes through daily.
E.U. Transport Commissioner Apostolos Tzitzikostas declared there was no evidence of current shortages, but when it comes to sharing reserves in the future, “what is voluntary today could become compulsory.”
“If real supply issues arise, our emergency stocks must be put to best utilize,” Tzitzikostas notified reporters after a meeting of the E.U.’s transport ministers, stateing emergency stock must be utilized only when necessary. “Any national release of fuel must be done in full transparency to avoid market distortions.”
According to Tzitzikostas, the executive body is also examining alternative imports, including U.S. “Jet A” fuel, which has a higher freezing point than the European standard. Additionally, the bloc is viewing at easing regulation that requires European airlines to purchase 90 percent of their fuel at E.U. airports.
The Commission is due to present a broader package of energy and transport measures on Wednesday guidance airlines how to handle airport slots and public service obligations if jet fuel shortages take place. Tzitzikostas declared a “new fuel observatory” would be set up to monitor supplies, starting with jet fuel.
DHL Group CEO Tobias Meyer states the logistics giant can secure jet fuel for its planes in Europe through June, but there’s less certainty about supply across Asia.
“So far, we have no shortages or indication of shortages with the suppliers we work with, but especially in Asia, the visibility is quite limited,” Meyer notified a group of reporters in Brussels Tuesday. He declared China had significant strategic reserves, but noted that other countries in the region had less backup.
At European airports, Meyer declared DHL had visibility and supply commitments from oil companies into May and June. The CEO declared Europe had “two to four weeks more assurance” than in Asia.
“That capacity now is absorbed by carriers like us who fly directly Asia-Europe, so for instance Singapore-India-Europe is a route that we serve. For us, there’s more demand not less,” Meyer declared.
Meyer’s June timeline aligned with that of the International Energy Agency (IEA), which indicated a week ago that physical shortages of jet fuel would start that month.
Willie Walsh, the director general of the IATA (International Air Transport Association), called the IEA’s assessment “sobering.”
Although Tzitzikostas declared there were no signs of widespread flight cancellations in the coming weeks or months, Walsh felt more cancellations would accelerate by the conclude of May on the current course.
“This is already happening in parts of Asia,” Walsh. “Along with doing everything possible to secure alternative supply lines, it’s important that authorities have well-communicated and well-coordinated plans in place in case rationing becomes necessary, including for slot relief.”
As part of the measures, the commission will emphasize the E.U. ramp up its production of sustainable aviation fuel (SAF) and synthetic fuels to reduce its depconcludeence on Middle East imports. According to Tzitzikostas, 15 percent of the E.U.’s jet fuel is imported from the Middle East.
MSC receives six ships through Hormuz
The crisis emanating from the Iran war has affected more than fuel prices, with vessels still largely trapped in the Persian Gulf due to the safety concerns at the Strait of Hormuz.
But although CMA CGM had to turn four of its vessels back into the gulf after a ship obtained hit with a projectile over the weekconclude, several Mediterranean Shipping Company (MSC) ships were able to build their way through the passage after turning off their AIS transponders, according to a report from container shipping consultancy Linerlytica on Monday.
Six of MSC’s ships built the eastward voyage Saturday as vessels had scrambled to pass through during a brief “reopening” of the strait.
According to data from MarineTraffic, 37 total vessels transited under the assumption that the strait was safe to transit. That expectation fell apart after Iranian forces resumed attacks on vessels, with crossings falling to just eight on Sunday.
The 19,224-TEU, Panama-flagged MSC Clara, the largest container ship in the Persian Gulf when the Iran war started, was one of the six that successfully sailed through. The five other vessels include the 16,000-TEU MSC Grace, the 13,102-TEU MSC Margrit XIII, the 9,200-TEU MSC Madeline, the 11,660-TEU MSC Francesca and the 6,673-TEU Epaminondas.
All but the last two MSC vessels have since resumed AIS transmission once they were safely out of the Arabian Sea.
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