Middle East Conflict Threatens Europe's Jet Fuel Supply
The ongoing Middle East conflict risks disrupting jet fuel supply to Europe, threatening up to 25% of Ryanair's fuel needs, according to CEO Michael O'Leary. If the conflict and supply disruption continue, significant impact on ticket prices and airline operations could occur through May and June.
- Country:
- United Kingdom
Jet fuel supplies to Europe face potential disruption if the Middle East conflict persists into May. This situation could jeopardize up to 25% of Ryanair's supplies, as mentioned by CEO Michael O'Leary. The International Air Transport Association (IATA) estimates up to 30% of Europe’s jet fuel demand stems from the Persian Gulf, making the region particularly vulnerable to supply impacts from the U.S.-Israeli war.
O'Leary noted that if hostilities cease and the Straits of Hormuz reopen by April’s end, the risk to supply would be negated. However, continued conflict may see 10% to 25% of Ryanair’s supplies at risk during May and June, he stated.
While Ryanair, Europe’s largest airline by passenger numbers, has not cut flights due to currently secure fuel supplies, O'Leary warns of the potential for significantly higher ticket prices this spring and summer. The budget airline has hedged approximately 80% of its fuel needs at $67 per barrel until March 2027. Market conditions, including higher oil prices and capacity constraints, might drive summer airfares over 3% higher year-on-year.
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