The jet-fuel crisis in Europe is getting more acute as May gets nearer. Europe has enough jet fuel for April and has supply issues for May but alternatives and solutions are currently being found.
Europe used to import a large share of its jet fuel from Kuwait with these imports making up at least 25% of all the share. These imports have effectively been shut down as the Strait of Hormuz remains closed. New sources are being tapped to alleviate the situation with the US becoming the primary and most immediate alternative. European jet-fuel imports from the US are set to increase sharply this year with the overall share of just 3% share of US imports estimated to increase significantly this year.
Nigeria is also preparing to increase its production of jet fuel at its Dangote refinery while the Nigerian government is also ramping up permits for more oil production sites although these will take time to materialise. Norway, Kazakhstan, South Korea, are also likely new sources for alternative jet-fuel imports. However new orders will take up to three weeks to deliver, and countries still ramping up production like Nigeria may only increase production significantly in months.
Europe may face a temporary jet fuel supply-shock in the weeks of May, but even if the Strait of Hormuz remains closed during Summer, supply chains will be adjusting and alternative sources of fuel will increase.
Iran is playing a battle against global supply chains. Its leverage with the Strait of Hormuz will remain until supply chains adjust, so the Iranian regime also has a time-window where its leverage its stronger and this time-window is closing at a gradual pace. This may also mean that the worse of the crisis is over as supply chains have already begun readjusting, such as by the diversion of Saudi Arabia’s exports to the Red Sea.
Feature below by Reuters.
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