Critical oil trade route, the Strait of Hormuz, has been closed for about one month since the start of the Middle East conflict. About one fifth of all global oil traded passes through the strait and the closure has shocked oil markets and spiked prices at the pumps.
But the UK now faces another pressing issue: the country will this week receive its last tanker of jet fuel from the Middle East, according to the Financial Times.
Airlines could face a sharp increases in jet fuel costs following disruption to key oil supply routes in the Middle East – including some of the most popular and busy airlines such as Ryanair, Jet2 and Eastjet.
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If Gulf oil supply is constrained, theoretical alternatives include China, South Korea, the United States, and India, OilPrice.com reported.
But each faces significant limitations: China remains geographically distant from Europe; South Korea faces little incentive to redirect cargoes to Europe; US refiners prioritize domestic aviation demand and supply parts of the Americas and Indian refinery output, increasingly derived from Russian crude, will be impacted by the EU’s restrictions on products made from Russian barrels.
Jet fuel accounts for roughly a quarter of airline operating costs, meaning sustained increases are typically passed on to passengers through higher ticket prices.
Industry analysts and airline bosses have already warned that fares are expected to rise in the coming weeks, with some estimates suggesting ticket prices could increase by as much as 20% if current pressures continue.
While airlines often hedge fuel purchases in advance, delaying the immediate impact on fares, the protection is limited.
As new, more expensive fuel supplies are factored in, prices for flights are expected to climb and Britons could see a surge in the price of flights bound for summer holiday destinations.
Travel demand is also expected to pick up heading into the weekend, as holidaymakers begin locking in summer getaways during the bank holiday.
With prices typically rising as demand increases and seats fill up, experts say the coming days could represent a key window before higher fuel costs and stronger demand combine to push fares up more sharply.
That means current prices may reflect a short window before both rising fuel costs and pre-Easter demand begin feeding through into ticket prices, prompting advice for travellers to consider booking sooner rather than later.