Global jet fuel supplies could take months to stabilise even if key shipping routes reopen, according to the head of the International Air Transport Association, as fallout from the Middle East conflict continues to disrupt refining capacity.
Speaking in Singapore, Willie Walsh warned that while there are signs of easing tensions, the impact on fuel production will linger well beyond any immediate ceasefire.
The issue centres on the Strait of Hormuz, a critical passageway through which a significant portion of the world’s oil and fuel supplies travel. Iran’s move to close the route as part of retaliatory actions in the ongoing conflict has severely restricted global jet fuel availability.
Although oil prices have begun to fall — dipping below $100 per barrel after Donald Trump announced a proposed two-week ceasefire dependent on the safe reopening of the strait — airlines are unlikely to feel immediate relief.
Fuel remains the second-largest cost for airlines after labour, typically accounting for around 27% of operating expenses, and jet fuel prices have surged disproportionately compared to crude oil. Since the conflict escalated, jet fuel costs have more than doubled, significantly outpacing the roughly 50% increase seen in crude prices before the ceasefire announcement.
Walsh said that even in a best-case scenario where the Strait of Hormuz reopens and remains operational, supply chains will not rebound overnight.
“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 given the disruption to the refining capacity in the Middle East,” he said.
Unlike crude oil, which can resume flowing relatively quickly, jet fuel depends heavily on refinery output — and that’s where the bottleneck lies. Damage and disruption to refining infrastructure in the region mean production cannot simply be switched back on at full capacity.
Despite the challenges, Walsh dismissed comparisons to the COVID-19 pandemic, which brought international travel to a near standstill.
“This is not similar to Covid. This is not a crisis anywhere close to what we experienced (in Covid),” he said. “In Covid, capacity reduced by 95% because borders closed. We're nowhere near that.”
Instead, he likened the current situation to previous industry shocks such as the aftermath of the September 11 attacks and the global financial crisis, noting that recovery timelines in those cases ranged from four months to up to a year.
Airlines, particularly across Asia, are already adapting to the strain. Carriers have been forced to cut some routes, carry additional fuel from departure airports, and introduce refuelling stopovers — all of which add costs and complexity to operations.
There has, however, been a short-term boost in market confidence. News of a potential ceasefire and the reopening of key routes has driven airline stocks higher, with gains reported across major carriers in Australia, New Zealand, Hong Kong and India.
Still, the disruption to Middle Eastern aviation hubs remains significant. Gulf carriers accounted for 14.6% of global international capacity last year, and while some of that capacity may be temporarily picked up by airlines in other regions, Walsh acknowledged it cannot be fully replaced.
“Some of that capacity will be replaced by airlines outside of the region, but there's no way they can replace the (entire) capacity that was provided by the Gulf carriers,” he said, adding that clearer data on the scale of disruption is expected in the coming months.
Looking ahead, there are signs that global supply could gradually rebalance. Refineries outside the Middle East — particularly in countries such as India and Nigeria — may increase production to help offset shortages. Walsh also indicated that exports from China and South Korea could resume once crude flows stabilise.
However, he cautioned that this adjustment will take time, even with strong financial incentives for refineries to ramp up output. Elevated refining margins — known as the “crack spread” — are expected to encourage increased jet fuel production, but not at a pace that delivers immediate relief.
For passengers, the knock-on effects may soon become more visible, with airlines facing sustained cost pressures that could influence fares and flight availability in the months ahead.
