The United Kingdom is bracing for a potential jet fuel shortage as the summer holidays approach, with supplies falling to critically low levels and rationing looming. The ongoing closure of the Strait of Hormuz, triggered by the Iran war, has caused extreme tightness in European jet fuel supply, leaving the UK particularly vulnerable due to its low stocks, heavy reliance on imports, and diminished refining capacity, according to a research note from Goldman Sachs.
Goldman Sachs Warns of Critical Levels
The Gulf region produces roughly one-fifth of the jet fuel traded on international markets, and Europe is a major customer. However, the strait's closure has choked global oil supply, forcing airlines to compete fiercely for fuel from other sources, driving prices higher. Since the conflict began on 28 February, jet fuel prices have doubled. In the past two weeks alone, airlines have cut approximately two million seats from their May schedules.
Goldman Sachs stated: "The UK is the largest net importer of jet fuel in Europe, and it holds no strategic reserves, leaving commercial inventories as the primary buffer. As a result, inventories in some countries, especially the UK, could fall to critically low levels, increasing the likelihood of rationing measures."
Airlines Respond to Rising Costs
The sharp rise in jet fuel costs has forced airlines to act. Some are cancelling or consolidating flights, while others have raised ticket prices. IAG, owner of British Airways, has announced it will increase fares to reflect higher fuel costs, admitting it is "not immune" to volatility. Air France expects a $2.4 billion (£1.7 billion) increase in its jet fuel bill this year, and American Airlines anticipates a rise of over $4 billion.
Michael O'Leary, CEO of Europe's largest airline Ryanair, told The Times that rivals are "desperately" searching for flights to cancel. In contrast, budget carrier Wizz Air has reassured passengers that its summer schedule will proceed as planned, stating operations remain "fully stable and unaffected" despite the potential shortage.
Government and EU Prepare Contingencies
On Monday, the European Commission announced it will issue guidance on jet fuel for airlines later this week. Spokeswoman Anna-Kaisa Itkonen said: "I don't think anyone knows how long this situation will last, so the best we can do is to prepare for all eventualities."
The UK government is also preparing for possible disruption. Transport Secretary Heidi Alexander is expected to warn that cancellations could affect summer holidays, with ministers drawing up contingency plans. These plans would allow airlines to consolidate flights and adjust schedules to manage the shortage. However, Prime Minister Keir Starmer warned last week that people may have to change "where they go on holiday."
Goldman Sachs analysts also highlighted the UK's reduced capacity to refine jet fuel, following the closure of Scotland's only oil refinery, Grangemouth, in April 2025. Concerns also persist over the future of the Prax Lindsey oil refinery in North Lincolnshire.
