Global airlines may have to brace for months of elevated fuel costs—even if the crucial Strait of Hormuz fully reopens—according to Willie Walsh, the head of the International Air Transport Association.
Speaking in Singapore, Walsh warned that while crude oil flows may resume quickly, jet fuel supply will take significantly longer to stabilize due to ongoing disruptions in Middle Eastern refining capacity.
His remarks come after Donald Trump announced a tentative two-week ceasefire with Iran, triggering a sharp drop in oil prices. The agreement depends on the safe reopening of the Strait of Hormuz, a vital shipping route responsible for transporting nearly 20% of the world’s oil.
Despite falling crude prices—often seen as a relief signal for global markets—Walsh cautioned that airlines and passengers should not expect immediate benefits.
“Even if it reopens and stays open, it will still take months to restore supply to required levels,” he said, highlighting that refinery outages—not crude shortages—are now the primary bottleneck.
Why Jet Fuel Prices Won’t Drop Quickly
The issue lies in refining, not extraction. The Middle East plays a critical role in producing refined petroleum products like jet fuel. Damage and disruptions to these facilities mean that even if crude oil flows resume, converting it into usable fuel will take time.
Walsh emphasized that the disruption impacts not just aviation fuel, but the entire chain of refined products globally.
Airlines Already Feeling the Pressure
Airlines across Asia are already taking costly measures to cope with the shortage. These include reducing flight frequencies, carrying extra fuel (known as tankering), and adding refueling stops—all of which increase operational costs.
The situation is particularly severe in import-dependent countries such as Pakistan, Vietnam, and Myanmar, where supply constraints have intensified.
Meanwhile, major exporters like China and Thailand have halted jet fuel exports, while South Korea has imposed export limits—tightening the global supply further.
Hope on the Horizon—But Not Immediate
Walsh expressed cautious optimism that once crude shipments normalize, key refining nations may resume exports. Refineries are reportedly ready to ramp up production, driven by high “crack spreads”—the profit margins for turning crude oil into refined fuels.
However, even in the best-case scenario, the recovery will not be immediate.
Market Reaction vs Reality
Following the ceasefire news, oil markets reacted sharply. Brent crude dropped over 13% to settle below $95 per barrel, while U.S. benchmark WTI also plunged.
But for airlines—and ultimately travelers—the cost relief may lag far behind.
Bottom line: Even if geopolitical tensions ease and oil flows resume, jet fuel prices are likely to remain elevated for months, keeping airfares high and airline margins under pressure.
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