The threat to summer holidays looming from jet fuel shortages

Key developments are emerging from the global stage. The threat to summer holidays looming from jet fuel shortages 8 minutes ago Share Save Add as preferred on Google Theo Leggett Transport Correspondent Step on to the tarmac at any major airport around the world, and you'll notice an unmistakable smell. A slightly sweet, oily scent, redolent of old workshops or antique paraffin lamps. It is as much part of the travelling experience as lukewarm coffee and queues at passport control.

It is, of course, the pervasive smell of jet fuel. That pungent aroma has become a lot more expensive in recent weeks. The price of jet fuel has risen dramatically on international markets since the start of the conflict in the Middle East.

The Details

There are now concerns that unless the Strait of Hormuz reopens soon, there could be physical shortages in some areas in the coming months. Many airlines have already pushed up ticket prices as the cost of flying has increased, and some have trimmed their capacity. Unless extra supplies can be found, a lack of fuel could lead to further disruption and cancellations heading into the peak summer holiday period.

The crisis has exposed just how vulnerable the industry in the UK - Europe's biggest consumer of jet fuel - is to disruption in the Middle East. So what impact might that have on our summer holidays - and what could be done about it? A scramble for jet fuel The Gulf region produces far more jet fuel than it requires for its own purposes.

As a result, under normal circumstances it is a major exporter, accounting for about 20% of the fuel traded on international markets each day. Europe as a whole is a key buyer of that fuel. Due to a lack of refining capacity, it is heavily reliant on imports, more than half of which typically come from the Gulf.

What Experts Say

With the Strait of Hormuz having been blocked for the past eight weeks, however, those supplies have not been available, prompting a scramble for fuel produced elsewhere. This has pushed up prices dramatically. In late February, before the first US and Israeli airstrikes, jet fuel was trading at $831 per tonne in Europe.

By early April, it had touched $1838 – an increase of more than 120%. It has since retreated but has consistently remained above $1500. A lack of refining capacity Jet fuel is essentially a highly refined form of kerosene with specialised additives, and is usually produced from fractional distillation of crude oil.

Because supplies are dictated largely by the availability of refining capacity, the loss of output from the Gulf has led to jet fuel prices increasing far more than those for crude oil. Getty Images After recent closures, there are just four refineries left in the UK, including Fawley in Hampshire owned by ExxonMobil (pictured). "We have had five refinery closures in the last two-and a-bit years in Europe, whereas jet fuel demand has been rising year on year," explains Amaar Khan, head of jet fuel pricing at Argus Media.

The development has drawn wide international attention, with diplomatic circles watching closely.