The Fuel Crisis: What Is Happening, and What It Means

The global fuel crisis triggered by the US-Israel war on Iran is entering another phase. The United States Navy has blockaded Iranian ports. Oil has crossed $100 a barrel on further negative news from the region. Europe’s summer flight schedule is under serious threat.

Iran’s Islamic Revolutionary Guard Corps closed the Strait of Hormuz in late February. Around 150 vessels are anchored and waiting. Daily shipping traffic through the strait fell from approximately 150 ships to fewer than 20.

The Strait of Hormuz is a 34-kilometre passage between Iran and Oman through which around 20% of the world’s seaborne oil and 22% of global liquefied natural gas normally flows.

Race boats run on the same pump fuel available at any garage forecourt. If that fuel is rationed, motorsport does not feature on the allocation list. This crisis is not abstract for powerboat racing. It is direct.

Oil Prices and the Economic Outlook

Global oil supply fell by 10.1 million barrels per day in March, according to the IEA’s April 2026 report. The agency now projects global oil demand will decline by 80,000 barrels per day on average across 2026, against previous growth expectations of 730,000 barrels per day. Brent crude stood at approximately $70 a barrel before the war. It crossed $100 on Monday as the US blockade took effect. The Dallas Federal Reserve has estimated that three-quarters of sustained disruption could reduce fourth-quarter global GDP growth by 1.3 percentage points.

Flights at Risk

Jet fuel prices have risen 95% since the conflict began, reaching $195 per barrel by late March, almost double pre-war levels. By early April, 7,049 of 104,618 global scheduled flights were cancelled on a single Monday, nearly 7% of all daily routes worldwide. The IEA has warned that April losses will be twice as severe as March, with Europe facing shortages after Asia absorbed the first shock.

Airlines are responding on three fronts: cutting routes, raising fares, and imposing fuel surcharges.

United Airlines CEO Scott Kirby told employees the airline would “tactically prune” approximately 5% of planned routes in the second and third quarters of 2026. Jet fuel costs have more than doubled in three weeks, he said, putting the airline’s additional fuel bill at $11 billion annually, more than double its best-ever profit year. United is preparing internally for oil to remain above $100 a barrel through 2027.

Delta Air Lines has logged a $400 million charge from rising fuel costs. Vietnam Airlines cancelled 20% of flights and suspended seven domestic routes. Scandinavian Airlines cancelled 1,000 Nordic short-haul flights. Air New Zealand is cutting more than 1,100 flights from May. AirAsia reduced capacity by 10%.

Fares are rising across the board. Air France-KLM announced round-trip tickets will increase by €50. South Korean carriers saw fuel surcharges from Incheon jump as much as threefold in April, adding over $700 to round-trip fares to the Americas and Europe. Thai Airways is projecting fare increases of 10% to 15%. Cathay Pacific raised surcharges by 34%. US domestic fares averaged $465 in early April, against no comparable period in recent years.

Lufthansa has now grounded 20,000 flights as the cost of aviation fuel continues to rise, making it the most significant capacity cut by a single European carrier so far. EU energy commissioner Dan Jorgensen was direct when he told Sky News on April 23: “Unfortunately, it’s very likely that many people’s holidays will be affected, either because of flight cancellations or very, very expensive tickets. Even if we do everything we can, if the jet fuel is not there, then it’s not there.”

Fuel rationing is already in effect at seven Italian airports. Air BP Italia has issued emergency notices capping fuel at as low as 2,000 litres per aircraft for non-priority short-haul flights at Bologna, Milan, Treviso, Venice, Brindisi, Pescara, and Reggio Calabria. Priority is being given to medical flights, state aircraft, and long-haul services of three hours or more.

Europe’s estimated commercial jet fuel reserves vary significantly by country. Based on Argus Media analysis of Eurostat data, the UK holds approximately three months of supply, Portugal four, Hungary five, Denmark six, Italy and Germany seven, and France and Ireland eight. These are not official government projections and do not account for demand shifts or logistical bottlenecks.

Ryanair CEO Michael O’Leary identified the UK as the most exposed country in Europe, citing Kuwaiti companies’ dominant share of UK aviation fuel supply. Guernsey’s Aurigny airline has already cancelled some flights from mid-April through to early June. Ryanair’s own guaranteed fuel supply runs only until the middle to end of May. UK regional carrier Skybus pulled all its Cornwall Newquay-London Gatwick flights in early April. Some carriers are now “tankering” – loading extra fuel at well-supplied airports to avoid shortages at destinations – at increased weight and cost.

Industry Assessment: Early May 2026

European jet fuel stocks have fallen to around 30 days of supply overall, down from approximately 37 days when the crisis began. The Amsterdam-Rotterdam-Antwerp hub is at a six-year low. The IEA’s mid-April warning that Europe had “maybe six weeks of jet fuel left” now sits alongside a harder figure: independent analysis places the critical threshold at 23 days, the level at which physical shortages at airports become likely and where demand destruction — flight cancellations driven by unavailability rather than cost — begins. On current consumption rates, that threshold could be reached by June.

The United States has become the primary emergency supplier. US jet fuel exports to Europe have risen from around 30,000-60,000 barrels per day before the conflict to more than 200,000 barrels per day, with total US jet fuel exports reaching record volumes in early April. The resulting global bidding war for available cargoes has pushed European jet fuel prices above $1,500 per tonne. A secondary consequence: US refineries shifting output towards exportable jet fuel are also driving up domestic US gasoline prices.

Airline hedging is the main buffer between the spot market and the travelling public. Lufthansa has hedged approximately 80% of its 2026 fuel requirements at pre-crisis prices, and Ryanair and EasyJet have similar cover. That protection is finite. Hedging books roll off through the year, and Lufthansa’s removal of nearly 20,000 flights through October 2026 — framed internally as saving more than 40,000 metric tonnes of fuel — signals that even well-hedged carriers are treating conservation as the safer strategy. KLM, Air France-KLM, Air Canada, SAS, and Cathay Pacific have all trimmed schedules or specific routes; Cathay cut 2% of May-June capacity. Ryanair, EasyJet, and Wizz Air have all flagged possible summer reductions and are monitoring closely.

The fare picture is uneven. Long-haul prices have risen sharply as fuel costs and reduced Gulf hub connectivity compound each other. Short-haul European fares have in some cases softened as demand weakens — a counterintuitive side effect of a crisis that has made many travellers reluctant to commit to bookings at all. The peak test is June to August. IATA has flagged that cancellations in Europe could begin by end-May; some Asian airports are already experiencing them. If the strait remains closed into the summer, peak northern-hemisphere season — the period when airlines operate their busiest schedules and their resilience is thinnest — is when the system is most exposed.

Sustainable Aviation Fuel has appeared in government briefings as a long-term answer. It is not a short-term one. Current SAF production volumes are too limited and the cost too high to make any material difference to a supply crisis measured in weeks.

Even if the Strait of Hormuz were to reopen, full normalisation would take months. Gulf refineries disrupted since February need time to restore export capacity, and the refinery-to-hub logistics pipeline cannot be rebuilt overnight. The supply gap does not close the day the strait does.

Industry Assessment: April 29

Willie Walsh, director general of the International Air Transport Association, said on Tuesday there was a risk of fuel rationing “particularly in Asia and Europe” but that supply remained robust for now. He placed the current crisis in context: “I think COVID was on a completely different scale. What we’re seeing here is, in effect, a cost issue for the airlines. The underlying demand for aviation remains robust, and that’s a positive.”

Sweden’s Energy Minister Ebba Busch issued an early warning on Tuesday about potential jet fuel shortages despite good current supply, cautioning Swedish citizens to think through their travel plans before committing to bookings.

Ryanair CEO Michael O’Leary, who had previously flagged the UK as the most exposed market in Europe, adopted a more optimistic position on Tuesday after conversations with fuel suppliers across Europe. “We think the risk of a supply disruption is receding,” he said.

Wizz Air CEO Jozsef Varadi reported strong summer bookings on Monday but cautioned that even a ceasefire would not quickly restore pre-crisis fuel economics. “Even if the war is stopped in Iran, I don’t think this is going to put the fuel price back to what it used to be two months ago,” he told reporters in London. EasyJet and tour operator TUI have both reported drops in forward bookings and issued profit warnings in recent weeks.

The picture among Gulf carriers is stark. Data from Cirium Ascend shows flights operated by Middle Eastern airlines fell 50% year-on-year in March. Bookings connecting via the main Gulf hubs for the second and third quarters are running 42.5% below normal. Total global passenger capacity nonetheless remains around 2% above 2025 levels, underlining broader network resilience outside the conflict zone.

Not every airline is suffering. Finland’s Finnair reports a net positive impact so far, with demand rising for its Asian routes as Gulf carriers’ reduced schedules open space on connecting itineraries. Norway’s Norwegian has dismissed supply concerns. Air France-KLM, IAG, and Lufthansa are all due to report first-quarter results this week, having raised fares and cut flight capacity in response to the conflict.

The UK Situation

The UK government is actively finalising emergency measures that would allow airlines to consolidate their schedules months ahead of any disruption, reducing the risk of last-minute cancellations. Under the proposals, services that do run are more likely to go ahead as planned, though passengers may face fewer flight options than usual. Whitehall sources described the measures as temporary. “We are actively looking at what can be done. If it becomes necessary, we can implement the plans quickly,” a government source told The Times.

Airlines UK, the industry body representing British Airways, easyJet, and Ryanair among others, confirmed it is “talking to the Government about crucial measures that will be needed to support aviation in the event of fuel disruption.”

Virgin Atlantic’s chief executive Corneel Koster has issued the most direct warning from a UK carrier chief to date, saying the aviation industry “cannot absorb” jet fuel prices at current levels. Koster told The Telegraph his hopes for a significantly stronger financial year had been derailed by the Iran conflict and the fuel price surge that followed. The airline has added fuel surcharges to all new bookings: £50 on economy, £180 on premium economy, and £360 on business class. Passengers who booked before the surcharges were introduced are not affected. Koster cautioned that the airline’s hedging coverage will decline in the coming weeks and that high fuel costs are “here to stay.” Virgin Atlantic has also scrapped its London-to-Riyadh service this month.

Aer Lingus has announced more than 500 flight cancellations, attributed to mandatory maintenance. Internal documents seen by the Irish Independent show transatlantic routes to Seattle, San Francisco, Minneapolis-St Paul, and Toronto are among the services being suspended. Routes from London Heathrow, Manchester, Newcastle, Birmingham, and Edinburgh are also being affected, with passengers rebooked onto alternative services. Dublin-to-Europe routes including Berlin, Zurich, Athens, Faro, and Amsterdam are being reduced.

As of late April, UK airlines are not reporting a shortage. Ryanair has been specific about its horizon. A spokesperson said fuel suppliers can guarantee supply to mid-end May. “If the Iran war finishes soon then supply will not be disrupted. If the closure of the Hormuz Straits continues into May or June then we cannot rule out risks to fuel supplies at some airports in Europe.”

There is one counterintuitive development. While fuel is scarce, British Airways and Virgin Atlantic are expanding their services to Asia. With Gulf carriers unable to operate full schedules – and passengers unwilling to transit through Dubai, Abu Dhabi, and Doha, all on the UK Foreign Office no-go list – there is an opportunity. Both airlines are moving to fill routes normally dominated by Emirates, Etihad, and Qatar Airways.

What Is Happening Around the World

Ireland experienced the sharpest domestic impact in Europe over the Easter weekend. More than a third of petrol stations ran dry after farmers and truckers blockaded the country’s only oil refinery and several fuel depots. Prime Minister Micheál Martin announced a €505 million fuel tax cut package on Sunday, on top of a €250 million measure introduced three weeks earlier. An RTÉ analysis on Monday warned the crisis had merely “taken a breather,” with oil prices rising again following the collapse of the Islamabad talks.

Australia, holding approximately 29 to 36 days of fuel reserves, launched a National Fuel Security Plan on March 30. Prime Minister Anthony Albanese urged citizens to take public transport and not over-fill at the pump over Easter. Victoria and Tasmania made public transport free for extended periods.

South Korea urged citizens to take shorter showers, limit phone charging, and reduce driving. The Philippines declared a national energy emergency in late March. Bangladesh ordered markets and shopping centres to close by 6pm. Egypt imposed a 9pm curfew on commercial premises and dimmed street lighting, with its monthly energy bill rising from $560 million before the war to $1.65 billion. Thailand reversed its fuel price caps under fiscal pressure and saw prices jump 22% in a day. Sri Lanka introduced a four-day working week for state institutions and schools. Myanmar and Pakistan, both heavily reliant on imported jet fuel, are among the most constrained aviation markets in the world.

China ordered major refiners including Sinopec to stop accepting new fuel export contracts in early March. Japan has released 80 million barrels from its strategic reserves, covering 15 days of domestic demand.

Alternative Routes

Exports through alternative routes, primarily the west coast of Saudi Arabia, Fujairah on the UAE’s east coast, and the Iraq-to-Ceyhan pipeline through Turkey, have increased to 7.2 million barrels per day from less than 4 million barrels per day before the war. Bypass pipelines available to Saudi Arabia and the UAE can handle an estimated 3.5 to 5.5 million barrels per day at most. The strait’s normal throughput is around 20 million barrels per day.

What Holiday-Makers Need to Know

Travellers departing from the UK or EU, or flying on a British or European airline from anywhere in the world, have strong rights under air passengers’ rules. If an airline cancels, it must rebook the passenger as close to the original schedule as possible, on any carrier with seats available, and provide meals and hotel accommodation if there is a significant delay.

If a passenger is informed of a cancellation less than two weeks in advance and no close alternative is offered, compensation of between £220 and £520 applies in principle. However, carriers are expected to argue that the aviation fuel situation constitutes “extraordinary circumstances.” If that argument succeeds, it removes the obligation to pay that cash compensation, but it does not remove the right to a full cash refund or to meals and hotel accommodation. Those rights apply regardless of whether extraordinary circumstances are invoked. Airlines sometimes offer vouchers in place of cash refunds; passengers are under no obligation to accept one. The law requires the refund to be paid in cash within seven days if that is what the passenger requests.

The position is weaker for travellers returning to the UK from beyond Europe on a non-British or EU carrier. Qatar Airways, for example, has no obligation under UK rules to provide an alternative flight or hotel. This catches out passengers who believe they are flying on British Airways through Doha, not realising Qatar Airways is actually operating the service.

Travel insurance is unlikely to help. Most policies exclude losses arising from “declared or undeclared war or hostilities.” As the fuel crisis is a direct consequence of the US-Israeli military action against Iran, insurers are likely to reject claims.

On surcharges: the major UK carriers have all hedged their fuel costs, which means passengers who booked before the crisis are protected. New bookings are a different matter. Virgin Atlantic is now adding £50 to economy fares, £180 to premium economy, and £360 to business class on new tickets. Virgin Atlantic’s CEO has made clear that further increases are likely as hedging coverage declines. The other major carriers have not yet announced equivalent surcharges on new UK bookings, but the industry body has acknowledged the government may need to intervene.

Package holidays are a different matter. Under the Package Travel Regulations, travel firms can demand more money if fuel costs have risen significantly. There is no upper limit to what they can ask. However, if the proposed surcharge reaches 8% or more of the holiday price, the passenger has the right to a full refund. Many surcharges are calculated to land at exactly 8% – equivalent to £80 on a £1,000 holiday – placing the burden squarely on the traveller.

Fuel surcharges on new flight bookings now range from £2 per sector on Guernsey’s Aurigny to £360 on Virgin Atlantic’s business class. Kenton Jarvis, chief executive of easyJet, told The Independent: “The industry has no choice. It’s a low-margin, highly competitive sector. We make about £7 per seat. If fuel goes up £10, you have to respond.”

One area where prices may fall rather than rise: Emirates, Etihad, and Qatar Airways are keen to fill their planes and restore passenger confidence. Deals to Gulf destinations and beyond to Asia, Australasia, and Africa may come in below the rest of the market.

The Powerboat Racing Dimension

Powerboat racing is highly exposed to the fuel crisis.

The logistical picture is equally direct. F1H2O boats were shipped from the season finale at Sharjah, UAE last December to their owners’ home countries. They now need to reach Cagliari, Sardinia, for the opening round of the 2026 UIM F1H2O World Championship. UIM F2 boats travel the European calendar by road and ferry, and many team members and race officials travel by plane.

XCAT has not announced a firm 2026 calendar. Given that the series had Fujairah, UAE scheduled for April 17-19 as its season opener, and that event sits directly inside the conflict zone, that silence is understandable.

The cancellations in the Middle East have already begun. The Dubai International Boat Show was rescheduled to November. Aquabike Promotion moved its planned Middle East season opener, citing “current global geopolitical circumstances.” The WEC Qatar 1812km, the first major motorsport race cancellation of the conflict, was postponed by the FIA on March 3. That decision set a precedent across international motorsport that has not been reversed. XCAT has Kuwait in October and Dubai in December on its intended calendar. The F1H2O season finale remains fixed at Sharjah on December 18-20. Neither series has said publicly what happens if those events cannot take place.

The teams, organisers, and governing bodies are watching and waiting. Even if the Strait of Hormuz were to reopen tomorrow, the supply disruption since February 28 has been severe enough to have lasting consequences. The price of fuel does not fall as fast as it rises, and the knock-on effects through freight, logistics, and travel costs will be felt across the sport long after the headlines move on.