Ceasefire Not Enough To Ease Jet Fuel Supply Shock — IATA

The International Air Transport Association (IATA) has warned that jet fuel supply disruptions could persist for months even if the Strait of Hormuz reopens, signalling continued pressure on global aviation.

IATA Director-General, Willie Walsh, disclosed this to reporters in Singapore, on Wednesday that while crude oil prices may ease, jet fuel costs will remain elevated due to disruptions to refining capacity in the Middle East.

“If it (the Strait of Hormuz) 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 said.

He explained that the current shock is less comparable to the COVID-19 pandemic and more aligned with crises such as the September 11 attacks and the Global Financial Crisis. Airlines, particularly in Asia, have already begun adjusting operations by cutting flights, carrying extra fuel, and adding refuelling stops.

Walsh added that although Gulf carriers may face temporary capacity reductions, the shortfall cannot be fully offset by airlines outside the region, leaving a near-term gap in global capacity.

He noted that countries including India and Nigeria could boost refined product output in the short term, while other producers may gradually ramp up supply as crude flows stabilise. Elevated refining margins, he said, are likely to incentivise increased jet fuel production globally, though recovery will take time.

The warning comes as the United States and Iran agreed to a two-week ceasefire aimed at reopening the critical shipping route. U.S. President Donald Trump said attacks would be suspended conditional on the safe reopening of the strait, while Iran confirmed acceptance of the deal, with talks expected to begin in Islamabad.

Iran’s Foreign Minister, Abbas Araghchi, said passage through the strait would resume under Iranian military oversight. Meanwhile, the United Nations, led by Secretary-General António Guterres, has warned that threats to Iranian infrastructure could breach international law and worsen humanitarian risks.

The crisis had earlier forced the closure of the Strait of Hormuz, which handles about 20 per cent of global energy shipments, triggering sharp increases in jet fuel prices worldwide.

In Nigeria, prices of Jet A-1 surged from about N950–N1,000 per litre before the conflict to over N2,000 per litre within weeks. The Dangote Refinery, which supplies over 90 per cent of the country’s jet fuel, remains heavily influenced by global pricing benchmarks such as Platts.

Platts jet fuel prices jumped from $780–$850 per metric ton to over $1,600 during the disruption, forcing airlines to consider fare increases.

Although crude benchmarks like Brent and WTI have softened following the ceasefire, industry experts warn that jet fuel prices will likely stay elevated until refining capacity is fully restored and supply chains stabilise.