Global aviation sector faces disruption due to instability in the Strait of Hormuz

The conflict involving Iran and ongoing instability in the Strait of Hormuz have significantly impacted global aviation operations. Disruptions in oil exports from the Persian Gulf have led to a global shortage of jet fuel and kerosene, products for which Middle Eastern refineries account for over 10% of global production. In Europe, jet fuel prices have reached historic highs, exceeding $200 per barrel, causing severe financial strain on airlines. The rapid rise in fuel costs, outpacing crude oil, has forced many carriers to cancel thousands of flights, ground older aircraft, and raise ticket prices. The Asia-Pacific region is particularly affected due to its reliance on oil shipments passing through the Strait of Hormuz, with data from OilX and Energy Aspects showing a decline in local refinery production to 2.9 million barrels per day. The market anticipates further route cuts as airlines struggle with rising operating expenses during the peak summer travel season.