IEA Warns of Europe Jet Fuel Shortage by June

IEA Forecasts Potential Supply Shortfall

The International Energy Agency (IEA) has warned that Europe could experience physical jet fuel shortages as early as June. The risk depends on the region's ability to replace its standard supplies from the Middle East following potential disruptions.

Europe's Heavy Reliance on Middle East Imports

Europe is highly dependent on Middle East jet fuel, which accounts for 375,000 barrels per day (bpd), or 75% of its net imports. While global demand is projected at 7.8 million bpd in 2025, Europe's exposure is significant. Stockpile levels vary, with Spain being a net exporter while the UK, the largest consumer, imports 65% of its demand.

Impact Scenarios Based on Supply Replacement

The IEA outlined several scenarios. If Europe cannot replace at least 50% of its Middle East volume, jet fuel stocks could fall below the critical 23-day demand cover threshold by June. If 75% is replaced, this level would be reached by August. Europe’s stocks have not dropped below a 29-day cover since 2020. A full replacement of supplies would adequately cover demand through 2026.

Outlook Summary

The primary factor determining stability is Europe's capacity to secure alternative jet fuel sources. Failure to do so could lead to supply shortages and demand destruction at key airports during the peak summer travel season.

FAQ

Q: What is the main cause of the potential jet fuel shortage in Europe?
A: The potential shortage is linked to disruptions in replacing normal jet fuel supplies from the Middle East, on which Europe is heavily dependent.

Q: When could a jet fuel shortage begin in Europe?
A: According to the IEA, a shortage could start by June if only 50% of the typical Middle East supply volume can be replaced.

Source: Investing.com