Airlines are still struggling to secure jet fuel months after the closure of the Strait of Hormuz, with Europe forecasting a fuel deficit and U.S. carriers reporting billions in extra costs. Separately, Vice President JD Vance said Iran has told Washington it does not plan to impose tolls on the strait, a signal that eased tension around the waterway.
Months after the Strait of Hormuz shut down, airlines are still scrambling to secure enough jet fuel to run their schedules. The corridor, which links the Persian Gulf to the Gulf of Oman and the Arabian Sea, normally carries roughly 20% of the world's oil when fully open, and its restricted traffic has strained fuel supply chains worldwide.
Europe carries the heaviest load
Europe relied on the Middle East for roughly half its jet fuel imports before the war and continues to feel the strain of the shortages. Consultancy Energy Aspects forecast a jet fuel deficit of almost 600,000 bpd across the region for the third quarter, against surpluses of about 116,000 bpd in the United States and 425,000 bpd in Asia-Pacific.
Europe's inventories stood at around 38 million barrels at the start of June, enough for roughly 30 days of demand. EU Energy Commissioner Dan Jorgensen said Brussels plans to coordinate reserve releases as required, and the U.S., Nigeria, Canada, India and South Korea have stepped in to supply fuel.
U.S. carriers absorb billions in extra costs
Jet fuel prices have swung sharply since the closure, peaking at $215.32 a barrel at the end of March before easing to just over $130 a barrel. Fuel makes up roughly 20% to 25% of an airline's operating costs, so keeping ticket prices down has been difficult. Southwest reported fuel expenses almost $900 million higher in the second quarter than a year earlier, and the airline shipped 12.6 million gallons of fuel from Houston to Los Angeles via the Panama Canal this spring to ease a West Coast supply crunch. United, meanwhile, expects nearly $6 billion in additional fuel expense for full-year 2026 compared with its outlook at the start of the year.
Fuel hedging has softened the blow for some. Ryanair said 20% of its unhedged fuel was hit hard by price spikes, pushing operating costs up 11%, though it has locked in 80% of its 2027 fuel at $67 a barrel and 15% of its 2028 fuel at $85 a barrel. Many U.S. carriers had scaled back hedging in recent years as domestic refining expanded, leaving them more exposed.
A tension-easing signal from Tehran
Away from the fuel market, Vice President JD Vance said Iran has told the United States it does not intend to impose tolls on vessels transiting the Strait of Hormuz. Market pricing reflected the shift too, with the odds of Iran imposing a fee by an August 31 deadline slipping to 9.5% from 10% over the prior 24 hours.
The statement does not resolve the underlying crude oil supply disruption still squeezing airlines. But it removes one point of escalation from a standoff that has already reshaped global fuel flows for months.
Sources: Oilprice.com, Crypto Briefing
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