The conversation around jet fuel shortages often starts in the wrong place. Most assume the issue is crude oil supply, geopolitical blockades, or logistics constraints. That is only partially true, because the real constraint is refining capacity, not access to crude itself. Crude oil is essentially a mixture of hundreds of different hydrocarbon molecules, and refining is the process of separating those molecules based on their boiling points.
With a mixture of chemicals and heat, different fuels are extracted across the refining column. Bitumen sits at the bottom, followed by heavy fuel oil used in shipping, then diesel, and above that kerosene (jet fuel), with lighter products like butane and LPG produced at the top. Jet fuel is not a dominant output in this process. Kerosene typically represents only 10 to 15 percent of the yield from crude oil, which means aviation is structurally dependent on refining priorities rather than crude availability.
Succinctly, the price of jet fuel has spiked not because of crude oil shipping constraints but because of jet fuel refining capacity constraints. Aviation is a global industry, and while one region may appear stable, the moment an aircraft operates internationally, it becomes exposed to the refining and storage limitations of another region. That is where the imbalance begins to show.
A global system shaped by regional refining realities
In the United States, there is technically no shortage. According to EIA data, jet fuel production averaged 1.815 million barrels per day over the first 11 months of 2025, with projected 2026 demand at 1.74 million barrels per day. On paper, that suggests equilibrium. However, jet fuel rates have doubled, driven by reduced refining capacity following infrastructure closures in previous years. Supply exists, but the ability to convert crude into usable aviation fuel is constrained, which is what the market is reacting to.
China presents the opposite dynamic. China and the United States are roughly equal in total refining capacity, making them the world’s two largest refining nations. Just months before the current crisis, China had more jet fuel than it could sell, with supply exceeding domestic demand by over 40 percent and a projected surplus of 390,000 barrels per day. Chinese refiners had already shifted toward aviation fuel production to compensate for declining demand in gasoline and diesel.
In mid-March 2026, Beijing banned jet fuel exports to ration reserves and manage rising domestic airfare. That single policy decision immediately tightened supply in import-dependent markets such as Vietnam, Myanmar, and Pakistan, while also affecting countries like Australia, which sourced a third of its jet fuel from China in 2025. China entered this period with approximately 1.3 billion barrels of reserves, enough to last nearly two years even under severe disruption scenarios, effectively shielding its domestic market while the rest of the world faces tighter conditions.
Europe’s exposure and the consequences of reduced capacity
Europe is the region most exposed to this imbalance. Total refining capacity in Europe stood at around 13 million barrels per day in 2024, but in 2025 alone, four refineries ceased processing crude oil, removing approximately 400,000 barrels per day from the market. Long-term projections suggest that European refining capacity could decline by more than 5 million barrels per day by 2050, representing nearly half of current capacity.
This reduction is not accidental. Europe is actively dismantling refining capacity in the name of decarbonization, but the timing has exposed a structural weakness in the system. Jet fuel imports into the EU are projected to reach 25.5 million metric tons in 2025, as traders seek to meet airline demand and offset refinery closures. At least 42 percent of those imports historically passed through the Strait of Hormuz, and with that corridor now under pressure, nearly half of Europe’s imported jet fuel supply is at risk.
The impact is already visible at the airport level. Italian airports, including Bologna, Milan, Treviso, and Venice, have introduced restrictions citing limited fuel availability, and airlines are preparing for potential cancellations if supply constraints persist. Europe is reducing refining capacity at the same time geopolitical instability is testing global energy flows, and that combination is now translating directly into operational disruption.
Airlines, cost structures, and the reality of passing it on
India sits in a more complex position. The country imports over 85 percent of its crude oil requirements, with a significant portion transported through the Strait of Hormuz, which creates immediate exposure to any disruption in that corridor. At the same time, India is self-sufficient in jet fuel and is a net exporter, producing approximately 17 million tons annually against a demand of just under 10 million tons.
This creates a different type of vulnerability. Jet fuel supply remains stable domestically, but crude input risk continues to drive cost exposure. In response, India has imposed export duties on jet fuel to ensure domestic availability, reinforcing the idea that this is not purely a supply issue but a system-wide balancing act between refining, policy, and energy security.
So what irony is this? The demand for jet fuel is exponential, but the refining capacity is linear. Airports are hoarding, airlines are hedging, and the industry is reacting tactically rather than solving the structural constraint. Hedging strategies reflect this uncertainty, with Ryanair approximately 84 percent hedged at $77 per barrel, Lufthansa at 82 percent for the first quarter but dropping later in the year, IAG at 75 percent early but closer to 50 percent by year-end, and Air France-KLM following a similar pattern.
SAS had zero hedging and has already cut 1,000 flights, which shows how exposed airlines can be without protection against fuel volatility. Delta Air Lines has taken a different approach by owning the Monroe refinery in Pennsylvania, effectively creating a natural hedge against refining constraints. These are not uniform strategies but defensive responses to an unstable input cost that airlines cannot fully control.
All airlines are of national security interest and must continue to operate regardless of external shocks, yet they remain structurally unprofitable. This makes it difficult for them to absorb rising costs internally, and those costs are instead passed on to consumers through pricing structures that extend beyond base fares. Baggage fees, seat selection, boarding priority, and other ancillary charges are all mechanisms through which fuel costs are redistributed.
Fuel represents between 20 and 35 percent of total aircraft operating costs, which is more than the combined expense of maintenance, salaries, and other operational categories. As fuel prices rise, airlines have limited flexibility, and the impact is felt through reduced frequency on less-profitable routes, higher ticket prices, and increased scheduling volatility. The short-term squeeze will be felt most by passengers, particularly in secondary markets.
A system under pressure: airspace, policy, and what comes next
The aviation industry typically operates along the shortest great-circle routes to minimize fuel burn and time, but that assumption no longer holds in the current geopolitical environment. Conflicts across the Middle East, Eastern Europe, and parts of Africa have forced airlines to reroute flights, often adding hours to flight times and increasing fuel consumption.
The conflict between Iran and the Gulf states, along with Israel and Lebanon, has added to an already complex airspace environment that includes restrictions over Russia and Ukraine, as well as regions in Africa where insurance coverage is limited or unavailable. As a result, the industry is already flying approximately 1,000 additional hours globally to avoid conflict zones, which directly increases fuel burn and compounds the pressure on supply.
There is an expectation that airlines may cushion the impact for passengers, but that depends entirely on financial position and regional dynamics. South America has seen the strongest growth in airline traffic at 8.3 percent, followed by Europe, Asia Pacific, and North America with more modest increases. However, growth does not translate into margin expansion, and rising operating costs limit airlines’ ability to absorb shocks.
The only region where consumers may see some relief is China, where domestic fuel availability has created a buffer. Europe, by contrast, faces the most pressure, not only because of reduced refining capacity but also because of recurring operational disruptions, such as seasonal air traffic control strikes, which further constrain capacity and reliability.
The implications extend beyond airline operations into manufacturing and long-term strategy. The current situation suggests that decarbonization efforts may be outpacing operational reality, particularly in regions that are reducing refining capacity without viable alternatives in place. Cutting refinery output while demand continues to grow does not meaningfully reduce emissions; instead, it increases dependence on external supply and weakens infrastructure resilience.
Global aviation accounts for approximately 2 percent of total greenhouse gas emissions, and addressing this requires coordinated action across sectors rather than isolated reductions in refining capacity. Without that coordination, the result is economic pressure without a proportional environmental benefit, which ultimately affects both industry stability and national energy security.
From a fleet perspective, the industry has already adapted to fuel efficiency pressures. Four-engine aircraft have largely been retired from passenger service, with only a limited number remaining in cargo operations or niche roles. Modern aircraft are significantly more fuel efficient, and most airlines have already optimized their fleets within current technological limits.
Furthermore, continued increases in fuel costs in the short term may actually accelerate innovation, as operators are pushed to reduce fuel consumption through efficiency gains and alternative solutions. In this scenario, higher fuel costs become a catalyst rather than a constraint, driving investment toward technologies that are less dependent on fuel over time.
What passengers can realistically expect
Passengers have limited control in this environment, but there are still practical steps that can improve outcomes. Booking early remains the most effective strategy, as availability becomes constrained closer to departure. Flexibility in routing and timing increases the likelihood of maintaining travel plans, and traveling light reduces exposure to operational disruptions.
In hub-and-spoke systems, airline choices are often limited, with certain carriers dominating specific regions, reducing alternatives when disruptions occur. Passengers will need to adjust their expectations, as reliability is increasingly influenced by factors outside the airline’s control. Being flexible, prepared, and patient is no longer optional but part of navigating the current aviation environment.
Fuel shortages in aviation are not a temporary disruption. They are the result of a structural imbalance between demand growth and refining capacity, amplified by geopolitical risk and policy decisions. This is not simply a fuel issue but a broader question of how aviation infrastructure, energy policy, and global mobility are aligned in practice.
Until refining capacity, energy strategy, and aviation demand are addressed together, the system will continue to operate under pressure, and that pressure will continue to surface through cost, complexity, and constraint.
Pilot, president, and founder of Icarus Jet, a leading global trip support and aircraft management company, Kevin Singh has flown globally as a chief pilot and captain on private jets like the Hawker 800-A and 850 XP, and the Challenger 600 series and Global 6000.
