Europe’s Thin Jet-Fuel Buffer Puts Airlines Back on Hormuz Watch

Key Findings

Europe has rebuilt jet-fuel inflows from the United States, Asia and newer suppliers, but its physical buffer remains unusually thin. Reuters reported that regional inventories stood at 38 million barrels at the start of June, versus 99 million barrels in the United States, leaving Europe with less than 30 days of demand cover.

Energy Aspects estimated a European supply deficit of almost 600,000 barrels per day in the third quarter, compared with projected surpluses of 116,000 bpd in the United States and 425,000 bpd in Asia-Pacific. Britain, France and Germany are particularly exposed after years of refinery closures increased reliance on imported fuel.

Market takeaway: Europe has avoided an immediate shortage, but a renewed disruption to Gulf exports could quickly widen jet-fuel cracks, raise airline costs and revive pressure for coordinated reserve releases.

Supply Response Has Bought Time

European jet-fuel imports reached 673,000 bpd in June, the highest since October 2025, according to Kpler data cited by Reuters. The United States and Nigeria were the largest suppliers, while Canada, India, South Korea and Kuwait also contributed cargoes. Italian refiners increased jet-fuel production by 10% in the first four months of the year, helping domestic output meet nearly 70% of Italian demand in March and April.

The price signal has eased from the March shock: northwest European jet fuel was around $133.27 per barrel, down from a record $215.32 at the end of March. That relief matters because fuel typically represents 20%–25% of airline operating costs, although strong travel demand and constrained capacity make immediate fare reductions unlikely.

Why Hormuz Still Matters

The U.S. Energy Information Administration estimates that 20.9 million bpd of crude oil and petroleum liquids moved through the Strait of Hormuz in the first half of 2025. The same route also carried 11.4 billion cubic feet per day of LNG, more than one-fifth of global LNG trade. Europe had sourced roughly half of its jet-fuel imports from the Middle East before the conflict disrupted established flows.

The International Energy Agency’s July report underscores the mismatch between crude availability and refined-product security. Global supply rebounded by 4.1 million bpd in June as Hormuz flows partially recovered, yet refinery runs remained 6 million bpd below year-earlier levels and product cracks and refining margins reached four-year highs in early July. The IEA said normalization still depends on tanker traffic recovering and Middle Eastern refineries and export flows restarting.

What Markets Should Watch

• Hormuz transit volumes: renewed interruptions would hit both crude and refined-product logistics.
• European inventory cover: a move materially below one month would increase the risk of emergency stock releases.
• Jet-fuel cracks: renewed widening would pressure airline margins before it necessarily feeds through to ticket prices.
• Alternative cargo flows: sustained arrivals from the United States, Nigeria, India, Canada and East Asia are critical to bridging the regional deficit.

For airline equities, the near-term question is not simply the level of crude oil, but whether Europe can keep securing finished jet fuel through a fragmented and longer-distance supply chain.