Global airline industry braces for a prolonged strain on jet fuel supply and higher fares even if the Strait of Hormuz reopens, as the head of the International Air Transport Association (IATA) warned on Wednesday, noting that it would not quickly restore balance after refinery disruptions across the Middle East.
“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be,” Willie Walsh told reporters in Singapore, adding that the bottleneck lies not only in crude availability but also in disrupted refining capacity across the Middle East, a key hub for global fuel processing.
Past experience shows the aviation industry tends to pass rising fuel costs on to passengers by lifting ticket prices, Walsh emphasized.
Exports could resume, but timing uncertain
The pressure is most visible in lower-income, import-dependent countries such as Vietnam, Myanmar, and Pakistan, Walsh stressed. Supply constraints intensified after China and Thailand halted jet fuel exports, while South Korea capped shipments at last year’s levels.
Walsh suggested that a recovery in crude flows could prompt major exporters like China and South Korea to resume shipments of refined products, offering some relief to strained markets. “There is refining capacity available once we get the crude oil flowing,”he said, while cautioning that the ramp-up would not be immediate.
He added that elevated refining margins, known as the crack spread, could encourage refineries to increase jet fuel production, potentially easing supply over time.
Source: turkiyetoday