The International Air Transport Association (IATA) has warned that global jet fuel supply chains may take months to stabilise, even if the strategically vital Strait of Hormuz fully reopens, underscoring a deeper structural challenge facing the aviation industry.
According to IATA Director General Willie Walsh, the current disruption differs significantly from previous fuel crises. While earlier shocks were largely tied to crude oil availability and transport constraints, the present situation is being driven by damage and reduced output across key refining hubs in the Middle East—facilities that are critical to global jet fuel production.
Walsh emphasised that even with the restoration of crude flows through Hormuz, the recovery of refined jet fuel supply will lag considerably. The imbalance between crude availability and refining capacity has created a bottleneck that cannot be resolved quickly, pointing to a prolonged period of constrained supply.
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Fuel, which typically accounts for around 27 percent of airline operating costs, has once again emerged as a central pressure point. Jet fuel prices have risen sharply amid the disruption, creating a widening gap between crude oil price movements and downstream aviation fuel costs. This divergence is expected to persist as long as refining capacity remains limited.
Airlines are already adapting to the evolving conditions. Operational adjustments—including additional refuelling stops, increased fuel carriage, and tighter capacity management—are becoming more common as carriers navigate supply uncertainty. These measures, while necessary, are contributing to higher operating costs and reduced efficiency across both passenger and cargo networks.
The air cargo sector, in particular, is facing heightened exposure. Fuel volatility directly impacts freight rates, capacity planning, and network optimisation, with downstream effects on global supply chains. Time-sensitive shipments and high-value goods are especially vulnerable to disruptions in schedule reliability and cost predictability.
The impact is unevenly distributed, with import-dependent markets in Asia among the most affected. Countries such as Vietnam, Myanmar, and Pakistan are experiencing tightening supply conditions, exacerbated by reduced fuel exports from regional refining centres including China and Thailand. This regional imbalance is placing additional strain on already complex logistics networks.
Despite some easing in crude oil prices amid expectations of geopolitical de-escalation, IATA cautions that downstream markets will not stabilise at the same pace. The structural nature of refinery disruptions means that rebuilding capacity and restoring output will require sustained time and investment.
While the situation does not approach the scale of demand collapse seen during the COVID-19 pandemic, it represents a significant operational and financial challenge for the aviation sector. For airlines and cargo operators alike, the coming months are likely to be defined by continued volatility, cost pressure, and the need for adaptive strategies.
As the industry navigates this period of uncertainty, IATA is calling for close monitoring of fuel supply dynamics and coordinated efforts across stakeholders to mitigate disruption. The pace of recovery will depend not only on geopolitical developments but also on the speed at which refining capacity can be restored—an increasingly decisive factor in the stability of global aviation.
