As the conflict in the Middle East continues, the supply of aviation fuel in some countries is becoming increasingly tight. Airlines in Asia are starting to cut flights, refuel extra at their home airports, and increase refueling stops on long-haul routes. However, experts say that these measures only address symptoms and not the root cause.
Unlike past oil crises that led to price increases, Iran’s blockade of the Strait of Hormuz has cut off about 20% of the global supply of aviation fuel that is refined from the Persian Gulf region. Furthermore, major refining centers in Asia (such as China, South Korea, Japan, and Singapore) heavily rely on Middle Eastern crude oil imported through the Strait of Hormuz to produce aviation fuel. When the passage is blocked and crude oil supply is disrupted, local fuel production in Asia also declines.
This has forced governments, airlines, and airports to consider implementing fuel rationing. European airlines are also preparing to handle the current chaotic situation in a similar manner.
Shukor Yusof, the founder of aviation consulting firm Endau Analytics, told Reuters, “In discussions with various airlines, I found that they are very concerned about the future. Because nobody knows when the war will end, or when the supply chain and raw materials can resume from the Persian Gulf region.”
Analysts point out that while the United States has sufficient domestic supply, Asia, Europe, and Africa will face the greatest risks. In low-income and import-dependent markets in Asia like Vietnam, Myanmar, and Pakistan, the impact is particularly severe.
In the past, airport fuel transport interruptions or fuel contamination causing temporary shortages usually only triggered fuel rationing rather than complete cut-offs. Typical responses by airlines include tankering extra fuel at their home base (loading more fuel than usual so the aircraft doesn’t need refueling upon reaching its destination or only requires minimal refueling), increasing refueling stops on long-haul routes, reducing cargo loads, or more directly, “reducing flights.”
Michael O’Leary, the CEO of Ryanair, expressed concerns last week about the Middle East conflict not ending in the short term, saying, “If there is a risk of 10% to 20% fuel supply disruption in June, July, or August, we and other airlines will start considering canceling flights or reducing capacity.”
Vietnam Airlines has significantly cut 23 domestic flights per week to save fuel, including routes connecting Hanoi, Ho Chi Minh City, and Danang. Ticket prices are expected to increase by 15% to 25%, with a potential maximum increase of 70%. Passengers are advised to book early and maintain travel flexibility.
Currently, airlines such as Vietnam Airlines, AirAsia X from Malaysia, Batik Air Malaysia, and Air India are reevaluating their flight schedules and operational strategies.
As a leading low-cost long-haul airline in Asia, AirAsia X has reduced capacity on multiple regional and international routes and introduced a “fuel surcharge.” Flights to cities like Melbourne and Sydney may see an additional charge of up to $30 per segment.
CEO Bo Lingam of AirAsia X also revealed that the airline now refuels extra before heading to airports in Vietnam from Malaysia. He explained, “This does not mean that Vietnam is not providing us fuel, but they have imposed limited rationing.”
Batik Air Malaysia has cut domestic capacity by 36%, which could impact domestic tourism in Malaysia. However, popular routes like Kuala Lumpur, Penang, and Langkawi will still maintain basic services.
In addition, Air India had to make a refueling stop in Kolkata on its flight from Yangon back to Delhi due to fuel shortages at Yangon International Airport in Myanmar.
Long-haul routes from Delhi to Southeast Asia and Australia have also been forced to increase refueling stops, raising operational costs and potentially adding 1 to 2 hours to the flight time. Therefore, passengers are advised to allocate sufficient buffer time in their travel plans.
Amid the situation, airlines such as Emirates and Qatar Airways in the Middle East are operating well below normal capacity due to direct impacts of the conflict. In Oceania, Tahiti International Airport has strictly limited international flight refueling to the “minimum required.”
Authorities in Pakistan have advised pilots to carry more fuel from foreign airports. However, this practice, known as “fuel tankering,” is costly as carrying extra fuel increases fuel consumption.
Despite flight reductions, the decline in passenger demand is not enough to offset the fuel supply gap. Reuters estimates that since the Middle East conflict began, at least 400,000 barrels of aviation fuel per day in the Asia-Pacific region have been affected, which is typically processed from crude oil in the Persian Gulf.
Alex Yap, a senior analyst at Energy Aspects, pointed out, “There is no simple solution to compensate for the loss of production, especially as refineries reduce output, leading to tightening supply in Asia.”
Industry insiders estimate that flight cancellations have only reduced Asia’s oil demand by about 50,000 to 100,000 barrels per day in April, indicating a need for even greater capacity reductions in the future.
Ellis Taylor, Cirium’s editor for Asia, warned, “While passenger demand seems resilient at the moment, we are just at the beginning of the flight reduction cycle. The economic slowdown caused by soaring oil prices may indirectly impact travel demand in the latter half of this year.”
Analyst Michael Linenberg from Deutsche Bank AG stated in a report that the conflict could force thousands of aircraft around the world to be grounded, potentially leading financially vulnerable airlines to face closure.