No jet fuel shortage in Europe, transport chief says, despite Middle East conflict – business live

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With summer approaching, holidaymakers have been growing nervous that the Middle East crisis might leave airlines short of fuel.

But despite the lack of progress to reopen the strait of Hormuz, the European Union’s transport chief has insisted there are no signs of jet fuel shortages in Europe in the coming months.

Transport commissioner Apostolos Tzitzikostas has told Reuters:

double quotation mark“There is currently no jet fuel shortage in Europe. We have no signs that we will have a shortage in the coming period.”

Tzitzikostas pointed out that current high jet fuel prices have prompted airlines to cut uneconomic routes (an example of the demand destruction created by high energy costs), saying:

double quotation mark“This is why we see that some airlines are choosing to cancel some of their routes that didn’t make any economic sense.”

In May, airlines cut two million airline seats from their schedules, or less than 2% of global aviation capacity.

Looking further ahead, Tzitzikostas suggested that the situation would be “very difficult” by the end of the year if Middle Eastern supplies remained disrupted.

double quotation mark“It’s critical that the war stops and that the Strait of Hormuz opens and this needs to happen as soon as possible .... We should always keep in mind that Europe is prepared. We have the emergency stocks in our member states.”

“For the time being, there is a certain degree of stability.”

Back in April, the head of the International Energy Agency said Europe has only six weeks of jet fuel left before shortages will hit.

Seven weeks on, flights continue – as Tzitzikostas points out – but airlines have been raising ticket prices to pass on the cost of higher fuel, and also to dampen demand.

The agenda

• 7am BST: Halifax’s UK house price index for May

• 8.30am BST: UN’s FAO Food Price Index

• 1.30pm BST: US non-farm payroll jobs report for May