Despite the blockade of oil shipments through the Strait of Hormuz and a doubling of jet fuel prices, the European aviation industry remains confident ahead of the crucial summer season. Airlines, airport operators, and tour operators maintain that there are no fuel shortages. This industry optimism stands in stark contrast to grim warnings from traders and experts. The International Energy Agency (IEA), for instance, forecasts that global oil supply will fail to meet demand this year. Industry insiders note that the aviation and tourism sectors have a vested interest in downplaying the issues: 'Summer is the most important earnings period for airlines, and naturally they want to reassure their customers that they can book with confidence,' says independent aviation analyst John Strickland.

The conflict between Iran and the U.S. has brought oil flows through the strait to a near standstill. Typically, about one-fifth of the world's oil and a quarter of European jet fuel pass through this route. In the Amsterdam-Rotterdam-Antwerp (ARA) region, which supplies Northwest Europe with kerosene via pipelines and barges, inventories have fallen to near-record lows, according to LSEG data.

'SUPPLY SECURED UNTIL MID-JULY'

Leading industry representatives, however, are dismissing concerns. Sebastian Ebel, CEO of travel group TUI, called the discussion regarding a jet fuel shortage 'very surprising.' 'There is no indication of it at all,' he said during the presentation of quarterly results on Wednesday. He sees no bottlenecks in the coming weeks and expects no impact during the summer, aside from pricing. Lufthansa CEO Carsten Spohr emphasized that supply is secured at least until early summer. 'Until mid-July, we can certainly assume that stocks and deliveries will be sufficient.' Beyond that, visibility decreases somewhat. Half of the missing jet fuel shipments from the Middle East are currently being offset by higher imports from the U.S. and Nigeria, small volumes from Israel, and slightly increased production in Europe. Furthermore, commercial inventories exist alongside state emergency reserves.

Ryanair CEO Michael O'Leary told Reuters in late April that the risk of supply disruption was receding. However, airlines must pay high prices for replacement fuel deliveries. Wizz Air CEO Jozsef Varadi pointed to jet fuel prices of nearly 1,400 dollars per tonne - roughly double the pre-war level. This, he argued, incentivizes suppliers to seek creative logistics solutions.

'EVERYTHING DEPENDS ON THE MIDDLE EAST SITUATION'

Additionally, airport operators have bolstered their reserves. According to aviation technology firm i6 Group, jet fuel stocks rose by more than 60 percent in April. This helped calm nerves after several Italian airports had warned of potential shortages. 'In the short term, we certainly see no impact on supply,' said Gary McLean, Managing Director of Dublin Airport. He added that there are no concerns in this regard for the summer either.

At the political level, efforts are also being made to smooth the waters: 'We do not expect a very serious security of supply problem in the short term,' EU Energy Commissioner Dan Jorgensen told reporters on Wednesday. 'But we cannot rule out that there will be security of supply issues in the longer term. That, of course, all depends on the situation in the Middle East.'

(Reporting by Ilona Wissenbach, Conor Humphries, Joanna Plucinska; Edited by Sabine Wollrab and Ralf Banser. For inquiries, please contact our editorial office at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)

- by Alessandro Parodi