Key Takeaways:
Europe has imported jet fuel from the US and Asia, pushed domestic refineries harder and drawn on inventories — yet its stocks still stand at less than 30 days of demand cover, the tightest of any major market, as renewed US-Iran military escalation threatens the supply lines it depends on most.
"We still do expect some tightness through August at this rate," said Janiv Shah, an analyst at Rystad Energy.
Data from consultancy Energy Aspects dated June 18 shows Europe faces a supply deficit of nearly 600,000 barrels per day in the third quarter, against surpluses of 116,000 bpd in the US and 425,000 bpd in Asia-Pacific. Inventories stood at 38 million barrels at the start of June, compared with 99 million in the US, Reuters calculations show — equivalent to less than a month of demand.
The crunch comes as the Strait of Hormuz, conduit for roughly a fifth of the world's seaborne oil and liquefied natural gas, again falls under threat. Iran declared the waterway closed "until further notice" over the weekend after the US launched a fourth wave of strikes, hitting around 140 Iranian military sites and bringing the week's total to more than 300 targets. Brent crude jumped 5.3% to $79.22 a barrel on Monday, reversing a weeks-long retreat from the record $215.32 a barrel that jet fuel hit at the end of March.
Europe's Fragile Supply Chain
Before the US-Iran war broke out at the end of February, Europe relied on the Middle East for roughly half of its jet fuel imports. That dependence has forced a scramble for alternative supply. Europe imported 673,000 bpd of jet fuel in June, its highest since October 2025, according to Kpler data. The US and Nigeria were the biggest exporters, but cargoes also arrived from Canada, India, South Korea and, for the first time since early March, Kuwait via a ship-to-ship transfer.
Italian refiners increased jet fuel production by 10% in the first four months of the year, enabling domestic output to meet nearly 70% of demand in March and April, according to UNEM, the country's fuel producers' association. Eni, which accounts for about half of Italy's jet fuel capacity, boosted output by importing semi-finished products from outside Europe, industry sources said.
The UK has the tightest supply-demand balance on the continent, Energy Aspects data shows. Britain, France and Germany are particularly vulnerable after decades of refinery closures left them more reliant on Middle Eastern shipments via the Strait of Hormuz.
A Widening Refined Products Crisis
The jet fuel squeeze is part of a broader dislocation in refined products markets. The gap between refined product prices and crude oil has hit a record in the US and other regions, even as crude benchmarks have all but erased the Iran war spike, Bloomberg reported. Russia, the world's second-largest diesel exporter, has banned diesel exports after Ukrainian attacks on its refineries, sending buyers into a bidding war for non-Russian supply. Refined product flows through the Strait of Hormuz have fallen to near 1 million barrels a day from about 5 million before the US attacked Iran, according to Citigroup.
The European Commission has acknowledged the risk of further deterioration. EU Energy Commissioner Dan Jorgensen said in June the bloc faced tighter jet fuel stocks toward the end of the summer holiday season and that Brussels would coordinate releases of national reserves if needed.
Jet fuel prices in northwest Europe have fallen to around $133.27 a barrel from the March record of $215.32, easing some pressure on airlines. Fuel typically accounts for between 20% and 25% of operating costs. But immediate discounts to air ticket prices are unlikely, analysts say, as demand remains strong and capacity is limited after many carriers cut flights to conserve fuel.
The last time Europe faced a comparable supply squeeze was in the immediate aftermath of Russia's invasion of Ukraine in 2022, when diesel and jet fuel prices surged as the continent scrambled to replace Russian barrels. The current crisis is different in nature — driven by military escalation rather than sanctions — but the outcome is similar: a structurally under-supplied market with few quick fixes and a summer travel season still in full swing.
This article is for informational purposes only and does not constitute investment advice.
