The European Commission has said that the EU is not facing a kerosene shortage, despite warnings from the head of the International Energy Agency that stocks might run dry within weeks amid turmoil in the Middle East.
Fatih Birol, who heads the International Energy Agency, said this week that Europe had “maybe six weeks or so” of jet fuel reserves left, with the Persian Gulf still largely closed to shipping.
“We are preparing for possible supply shortages,” a European Commission spokesperson told reporters on Friday, before contradicting Birol. “There is no indication of a systemic fuel shortage that would lead to widespread flight cancellations.”
Yet there are reports of widespread grounding of planes from across Europe. Dutch airline KLM cancelled 160 flights on Thursday, while Germany’s Lufthansa shut down its regional CityLine service, citing surging fuel costs. Hungarian low-cost carrier WizzAir reported “problems because of a shortage of jet fuel” in Italy.
WizzAir CEO Jozsef Varadi was sanguine, however. “In no other European country, so far, have we experienced a fuel shortage,” he told the Italian financial newspaper Il Sole 24 Ore. “For the time being, I think the situation in Europe is not that alarming.”
Warning signs
Other indicators, however, are flashing red.
Jet fuel stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refinery hub dropped to a six-year low on Wednesday, consultancy Insights Global said, after levels fell 7.6% to just shy of 600,000 tonnes (the popular Airbus A320 passenger plane carries about 20 tonnes when tanked up).
EU refineries have the capacity to meet only around 70% of the bloc’s kerosene demand assuming sufficient supplies of crude oil, with the UK slightly more exposed with two-thirds of aviation fuel demand covered.
The Commission explained the apparently contradictory messaging from Brussels and Birol’s IEA in Paris. The Turkish economist “was referring to Europe, which is not exactly the same as the EU”, the spokesperson said.
With Europe and Asia locked in a bidding war over dwindling amounts of jet fuel on the global market, the US refining industry looks to be the biggest winner so far, having doubled its export volume since the start of the US-Israeli war on Iran.
EU intervention missing
The EU has yet to intervene in jet fuel markets, where the bloc was most reliant on imports from the now-blocked gulf.
Next Wednesday, 22 April, the EU executive will present its first draft of interventions to deal with the energy shock emanating from Iran. In the latest draft of the plan, obtained by Euractiv, action on jet fuel is almost entirely missing, although there are indications it could be added before publication.
For now, Brussels is merely looking to “coordinate” refining capacity across the EU to ensure maximum output of jet fuel.
(rh, jp)
