Jet Fuel Crisis After Hormuz: Why Airlines Face Months of Shortages Despite Ceasefire

When a temporary ceasefire was announced on April 8, crude oil prices dropped below $100 per barrel and airline stocks surged . But IATA Director General Willie Walsh immediately poured cold water on the optimism. "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 told reporters in Singapore .

The core problem had shifted: crude oil could now flow, but the refineries needed to turn that crude into jet fuel were damaged or destroyed.

Ongoing fuel supply constraints and network disruptions

Even after the ceasefire, airlines were still grappling with acute shortages and were forced to cut capacity, impose surcharges, and cancel routes.

Jet fuel remains scarce and expensive. Walsh warned on April 8 that jet fuel would remain limited and costly for "several months" due to damage to Middle East refining facilities . He compared the disruption's impact to 9/11 in terms of how long it will take for prices to return to pre-conflict levels .

European reserves are critically low. The International Energy Agency (IEA) warned on April 16 that Europe had "maybe six weeks" of jet fuel remaining and that flight cancellations could begin "soon" . Airports Council International (ACI Europe) cautioned that without full reopening, a "systemic shortage" would hit within three weeks .

Airlines are cutting capacity. Airlines removed roughly 2 million seats from May–August schedules. Lufthansa alone cut 20,000 flights through October. Gulf carriers saw capacity drop by 77% . Airlines across Southeast Asia and Oceania added fuel surcharges or reduced frequencies as they were "particularly badly affected" .

Shipping traffic remains below pre-war levels. Even after the April 8 ceasefire, vessel traffic through the Strait of Hormuz stayed "far below pre-war levels," as the Wikipedia entry on the 2026 Iran war fuel crisis notes .

Key factors delaying recovery

1. Refining infrastructure damage is the primary bottleneck

The ceasefire reopened the Strait for crude oil transit, but the real bottleneck was that refineries across the Middle East were directly damaged during the conflict. Walsh explicitly said jet fuel supply would take months to recover "given disruptions to the Middle East refining capacity" .

By mid-May, Reuters reported that nearly 9% of global refining capacity was inactive due to the combined effects of the Iran and Ukraine wars . Asian refineries slashed output by at least 1 million barrels per day of diesel and jet fuel in April as crude imports hit a decade low . France's Finance Minister Roland Lescure confirmed on March 26 that an estimated 30–40% of Gulf refining capacity had been damaged or destroyed .

A Rystad Energy analysis estimated that the war inflicted approximately $58 billion in damage on energy infrastructure, with over 80 energy sites attacked since the US and Israel began operations .

2. Diplomatic limitations: a temporary ceasefire, not a resolution

The April 8 agreement was only a two-week temporary ceasefire, not a comprehensive peace deal . This created deep uncertainty: shipping companies, insurers, and refineries were reluctant to fully resume operations without guarantees against renewed hostilities. The fragility of the diplomatic arrangement slowed the return of normal tanker traffic and supply chains .

On April 17, Iran announced it would allow commercial shipping, but the US continued its blockade of Iran, and Iran reimposed restrictions . The situation remained fluid and unpredictable.

3. Uneven carrier resumption schedules

Recovery has been highly uneven by region. US refiners ramped up to near-maximum capacity through the rest of 2026 to fill global gaps , but European and Asian carriers — which depend most heavily on Middle Eastern jet fuel imports — have been slower to recover .

The Bloomberg graphic feature from June 27 notes that the crisis "exposed vulnerabilities" and that countries like the UK, Australia, and Mexico are more at risk than others . Australia, which sources most of its jet fuel from China, Singapore, and South Korea, had only 30 days' worth of jet fuel held in reserve .

4. Falling global demand is not providing relief

While some analysts expected the demand drop from reduced flight schedules to ease the supply crunch, the supply-side collapse has been far larger than the demand contraction. The IEA revised its refining outlook sharply downward for the Middle East and Russia, and the sheer scale of refinery outages kept the market tight .

5. Analyst projections for extended normalization

Multiple authoritative sources converge on a recovery timeline of several months, with elevated costs and reduced schedules persisting well into the second half of 2026.

• IATA (Walsh): Jet fuel supply will take "months" to recover — not weeks — and prices will take a similar timeframe to return to pre-crisis levels .
• IEA (Birol): Europe's jet fuel stocks would run out in ~6 weeks without resumed flows, implying months before inventories are rebuilt .
• Bloomberg (June 27): While the worst fears of summer travel stranding have been eliminated, the crisis "exposed structural fragility" in the global jet fuel supply chain that will take time to resolve .
• Bangkok Post / IATA (July 2): Even in early July, IATA was still warning that jet fuel prices and airfares "could remain high for longer than passengers expect" .

Bottom line

The reopening of the Strait of Hormuz was necessary but not sufficient. The core problem shifted from crude transit to destroyed and damaged refining capacity in the Middle East, combined with a temporary and fragile ceasefire, slow resumption of shipping, and structurally depleted inventories. Most authoritative sources — IATA, IEA, Reuters, Bloomberg, WSJ, and AP — converge on a recovery timeline of several months, with elevated costs and reduced schedules persisting well into the second half of 2026.