The International Air Transport Association (IATA) has cautioned that global jet fuel supply could take months to recover even if the Strait of Hormuz reopens following a temporary ceasefire between the United States and Iran.
IATA Director-General, Willie Walsh, told reporters in Singapore on Wednesday that while crude oil prices may decline with the reopening of the Strait, jet fuel costs are likely to remain elevated due to disruptions in Middle East refining capacity. He stressed that restoring full supply levels would take significantly longer than reopening the shipping route itself.
“If it (the Strait of Hormuz) 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,” Walsh said, comparing the crisis more to events like the September 11 attacks or the Global Financial Crisis rather than the COVID-19 pandemic.
Airlines across Asia have already begun adjusting operations by cutting flights, carrying extra fuel, and adding refueling stops, reflecting the severity of ongoing supply constraints. Walsh noted that while Gulf carriers’ reduced capacity may be partially offset by other airlines, gaps are expected to persist in the short term.
Countries such as India and Nigeria could temporarily boost refined product output to alleviate supply pressures, while other producers may gradually increase production once crude oil flows stabilize. Elevated refining margins are expected to incentivize global jet fuel production, but full recovery will be gradual.
The Middle East crisis, which saw the Strait of Hormuz—responsible for roughly 20% of global energy shipments—temporarily closed, has significantly impacted the aviation sector. In Nigeria, Jet A-1 fuel prices surged from around N950–N1,000 per litre pre-crisis to over N2,000 per litre during the conflict.
Dangote Refinery, which supplies over 90% of Nigeria’s jet fuel, has been central to domestic supply, though international indices such as Platts heavily influence pricing. Platts jet fuel prices jumped from $780–$850 per metric ton pre-crisis to over $1,600 amid scarcity and disruptions.
Industry experts warn that despite declining crude prices, jet fuel costs may remain elevated until refining capacity and supply chains fully normalize, potentially forcing airlines to adjust fares to offset the persistent high costs.
