Potential Jet Fuel Shortages Threaten UK Aviation Amid Iran Conflict

Michael O’Leary, the chief executive of Ryanair, has warned that the ongoing conflict in Iran poses a significant risk to jet fuel supplies in the UK, making it the most vulnerable country in Europe. The UK relies on Kuwait for approximately 25% of its jet fuel, and the war has led to a surge in prices and potential supply disruptions. As of last week, jet fuel prices averaged $195 per barrel, more than double the previous year's average, due to the blockade of the Strait of Hormuz, a critical passage for oil shipments.

The GuardianBirmingham MailThe Telegraph - UK

The conflict in Iran, which escalated following coordinated airstrikes by the United States and Israeli forces on February 28, has effectively closed the Strait of Hormuz, through which about 20% of the world's oil and 40% of Europe’s jet fuel typically passes. This blockade has raised concerns about the availability of jet fuel, particularly for airlines operating in the UK.

The Guardian

Michael O’Leary has been vocal about the implications of the fuel supply crisis, stating that if the war continues, there could be a risk of losing 10% to 25% of fuel supplies through May and June. Irish Premier Micheál Martin has also expressed concerns, emphasizing the serious threat posed by potential jet fuel supply interruptions. Transport Minister Darragh O’Brien noted that the EU is aware of the situation and is discussing measures to secure fuel supplies.

The Telegraph - UK

O’Leary indicated that Ryanair has hedged 80% of its fuel costs until March at $67 per barrel, but he highlighted that the primary concern is supply disruption rather than price. He stated, “If there’s a risk to 10% or 20% of the fuel supply in June, July or August, then we and all other airlines would have to start looking at cancelling some flights.” O’Brien confirmed that the EU is considering various measures to address the fuel supply crisis, including bulk purchasing and energy storage options.

The Telegraph - UK

In light of the situation, O’Leary has called on the UK government to abolish the air passenger duty (APD), which recently increased by £2 for short-haul flights. He argued that this tax makes UK air travel less competitive compared to countries like Sweden and Hungary, where similar taxes have been eliminated, resulting in increased tourism and job growth.

The GuardianThe Telegraph - UK

While O’Leary has stated that disruptions are not expected until early May, he also warned that if the conflict continues, the situation could change rapidly. There are varying opinions on the timeline for potential supply disruptions, with some officials suggesting that the situation could stabilize if the war ends soon.

The Independent

• “Of all the European countries at the moment, the one that is most vulnerable is the UK because of the market share that the Kuwaitis have here,” — Michael O’Leary, CEO of Ryanair

The Guardian

• “He said: “If this continues through to the end of April, we’re looking at a risk to supplies in early June.” — Michael O’Leary, CEO of Ryanair

The Telegraph - UK

• “So the EU are acutely aware of it, and I am too – aviation is critically important to Ireland.” — Darragh O’Brien, Irish Transport Minister

The Independent

As the situation develops, the aviation industry remains on alert, with Ryanair and other airlines closely monitoring fuel supplies and potential impacts on flight schedules.

Birmingham Mail