Global airline body warns replenishing jet fuel supplies could take months even if Hormuz reopened
The head of a body representing global airlines warned on Wednesday it would take months for jet fuel supply to recover even if Iran reopened the Strait of Hormuz, given disruptions to Middle East refining capacity.
Fuel is the second-largest expense for air carriers after labour, typically accounting for about 27% of operating expenses, according to the International Air Transport Association (IATA).
Iran’s closure of the Strait of Hormuz as part of retaliatory moves in the war has choked supplies of jet fuel globally and news of a ceasefire and the possibility of safe passage through Hormuz sent airline stocks soaring.
Oil fell below $100 per barrel after US President Donald Trump said he had agreed to a two-week ceasefire with Iran that was subject to the immediate and safe reopening of the Strait of Hormuz.
Willie Walsh, director general of IATA, told reporters in Singapore that while he expected crude oil prices to fall, jet fuel costs were likely to remain slightly elevated due to the impact on refineries.
“If it were to reopen and remain open, I think it will still take a period of months to get back to where supply needs to be given the disruption to the refining capacity in the Middle East,” Walsh said.
He shrugged off comparisons to the COVID-19 pandemic, which crippled global travel.
“This is not similar to COVID. This is not a crisis anywhere close to what we experienced (in COVID),” he said. “In COVID, capacity reduced by 95% because borders closed. We’re nowhere near that.”
The situation was more comparable to other shocks such as the downturns of 2008-09 or the aftermath of the September 11 attacks, he added.
“Post-9/11, the recovery took about four months. In 2008-2009 it was probably 10 to 12 months,” he said.
AIRLINE SHARES SURGE
Airlines across Asia have been cutting flights, carrying extra fuel from home airports and adding refuelling stops as the Middle East conflict squeezes jet fuel supply, piling pressure on an industry already hit by a doubling of jet fuel prices.
Jet fuel prices normally move in tandem with oil prices, but they have more than doubled since the Iran conflict, far outpacing a 50% rise in crude prices prior to the two-week ceasefire news.
The news and a possible safe passage through Hormuz lifted airline stocks across Asia. Shares of Australia’s Qantas Airways jumped more than 9%, Air New Zealand rose over 4%, Hong Kong’s Cathay Pacific climbed 5%, while India’s IndiGo soared as much as 10%
Walsh said the hit to capacity for Gulf carriers, which last year accounted for 14.6% of international capacity, would be temporary.
“Some of that capacity will be replaced by airlines outside of the region … but there’s no way they can replace the (entire) capacity that was provided by the Gulf carriers,” he said, adding that data from April and May would provide a clearer picture of the scale of disruption.
“I fully expect the Gulf hubs to recover and recover quickly,” he said.
On refining capacity, Walsh said the reopening of the strait, if sustained, would be positive not just for crude flows but for refined products, including jet fuel.
“It will take some time for refineries outside of the region to adapt and increase,” he said, pointing to India and Nigeria as countries with capacity to increase refined product output in the interim.
Walsh added he “would like” to expect China and South Korea to resume exports of refined products once crude flows resumed.
“So there is (refining) capacity available once we get the crude oil flowing, but it’ll take a little bit of time, and with the crack spread elevated the way it is, I think that provides an incentive for refineries to increase the production of jet fuel,” Walsh said.
The crack spread refers to refinery margins.
Shows
See AllAM Live
AM Live is NTV's morning current affairs show that sets the agenda for the day with insightful panels every weekday.
Business Redefined
Business Redefined is Kenya’s premier thought leadership platform for unpacking matters regarding economic and finance policy as well demystifying complex developments in the region’s capital markets.
Comedies
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Creatives & Coins Podcast
A podcast that dives deep into the vibrant and rapidly evolving digital creative economy in Kenya. This show explores the lives, challenges, and triumphs of individuals who are successfully navigating the gig and creative economies. From digital artists and content creators to freelance writers and tech entrepreneurs, we spotlight the voices that are shaping the future of work in Kenya.
Documentaries
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Entertainment
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Fixing The Nation
Fixing the Nation is a bold and groundbreaking show that will take an unflinching look at challenges facing the Kenyan society and the solutions that can move us forward. It is anchored by respected journalists Eric Lattif, Janet Mbugua, and Mariam Bishar. Podcast created by: Nation FM
Fixing the Nation
Fixing the Nation is a bold and groundbreaking show that will take an unflinching look at challenges facing the Kenyan society and the solutions that can move us forward. It is anchored by respected journalists Eric Lattif, Janet Mbugua, and Mariam Bishar
Full Episodes
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Gumzo La Sato
Gumzo La Sato is a live social issues show that aims to create awareness about issues affecting the larger society. The discussions range from Parenting, Marital bliss and struggles, Oppression, violence, and all matters of the Heart.
Health Diary
Health Diary is a weekly show that highlights different types of diseases/conditions and seeks ways to prevent, treat/manage them. The show debunks this through real life stories and also feature specialists in different fields, to offer medical advice on the same.
Letter To My Younger Self
Letter To My Younger Self is a podcast where guests get to write a letter to their younger self, from which Maxine formulates questions to ask them during the hour-long show.
Nation Reports
Nation Reports is a weekly podcast offers an opportunity for listeners to interact with various reporters and journey with them as they unravel the biggest most emotive stories.
One Health Lens Podcast
Discussing health matters and human stories from Kenya and across Africa. We talk big picture from people to policy, ecosystems, and everything in between. Follow us on LinkedIn: https://www.linkedin.com/company/onehealthlens
Paradise Lost
Paradise Lost peeks through the story of Louis Otieno, the times, and everything in between.
Primetime
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Speaking of GEN Z
Speaking of Gen Z brings you entertaining but meaningful conversations about a generation that is trying to navigate through adulthood. Join hosts Michelle, Jackie and Esther as they unravel all things Gen Z.
Sport On
Sport-On is a 30-minute sports magazine show on NTV and 3 hours on NATION FM. The show seeks to give the sports “fanatics” and “funatics” comprehensive and in-depth coverage of sports both locally and internationally.
Tech-over
The extent of technological growth is beyond mere acknowledgment; it has seamlessly integrated into our daily existence. A few years ago, the notion of paying electricity bills through mobile money or recharging with 'tokens' in Kenya seemed inconceivable. Online product sales were considered distant, and artificial intelligence is rapidly reshaping various facets of our lives. Amidst these technological leaps, those with a solid understanding of tech can navigate challenges, seize opportunities, and build a sustainable livelihood. Tech over Show aims to be the platform facilitating discussions among thought leaders, innovators, tech companies, and the government, addressing challenges and opportunities in Kenya's thriving tech industry.
Thamani
Thamani is a business show which is dedicated to emerging issues regarding micro, small and medium size businesses.
The Politalk podcast
This is The Politalk podcast. Here we look into the ins and outs of everything Kenyan politics. We pull no punches and have no reason to sugarcoat anything that matters to Kenyans.
The Trend
A two-hour-long live show that airs on Fridays. The show focuses on what is current in the entertainment industry, controversial and popular across all media platforms targeting those aged between 25 and 35 years.
The trend podcast
The trend podcast highlights and captures the best of banter from #TTTT segment that airs every Friday on NTV. It's the TTTT EXTRA
The Wicked Edition
The Wicked Edition with Dr. King’ori seeks to address serious issues through humour and relatable wit. It is a two-part half hour show filmed in front of a live audience
Trending
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Twende
Twende is a travel show that highlights beautiful, unique, diverse locations, people, and cultures. The show offers fresh perspectives on familiar locations and memorable experiences in new ones.
Unscripted
This Saturday evening lifestyle show lets viewers share their stories and life experiences as openly & honestly for the purpose of shifting the culture of silence.
VIP Access
VIP ACCESS is Anyiko Owoko’s YouTube and podcast show on Music and Culture dedicated to promoting Africa’s most promising talent and creatives. This podcast grants you VIP access into timeless interviews while providing a platform for rising as well as established artists across the continent. Since launching in 2018, Anyiko has interviewed over 70 African music stars.
WADR
This weekly news show aims to have all sides of debate but not be constrained by it, listen to main voices in the contest but not allow them to hold the viewers hostage, entertain debate but allow push back with all due respect.
When death do us part
In this podcast, three widowers openly speak about the process of grief, how they found themselves exposed to the emotional turmoil of losing their wives, and how society still does not know how to deal with them.
Your World
Your World is a health, wellness and variety show. It provides a platform for audiences and experts to share their experiences on how to improve or manage health issues, across Kenya and the Africa region.