Although the European Commissioner for Transport and Tourism, Apostolos Tzitzikostas, denies that there is any sign of an imminent shortage of jet fuel today, the EU is already preparing to face this emergency and ensure that commercial flights can operate if supply problems arise. Brussels will present its plan tomorrow to mitigate the energy crisis derived from the war in Iran, which will include, as the Greek commissioner has announced, the creation of an observatory to closely monitor the situation of reserves, the refining capacity of petroleum products, and also the search for alternative supplies in other parts of the world —such as the US— if necessary.
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Furthermore, Brussels wants to send the message that the EU maintains strategic reserves that will be released “only if strictly necessary and with full transparency” to avoid market distortions. That is, they will act in case of real supply problems, not simply due to high prices derived from the blockade of the Strait of Hormuz, as is the current situation. In addition, the Commissioner for Transport has stressed that any national release “must be done with full transparency to avoid market distortions between Member States.”
Plan B
Europe could import jet fuel from the US as an alternative supply
All this, after an important video conference meeting between Commission officials and the relevant ministers of the twenty-seven Member States, before the Cyprus summit where national leaders will analyze Brussels’ response to the crisis. Europe is already suffering the direct impact of rising fuel prices, especially for aviation, whose prices have doubled. This has led to the first flight cancellations and airlines recommending booking flights as soon as possible. The Commissioner for Energy, Dan Jorgensen, is more direct than his transport counterpart and warns in an interview with this newspaper that “we have to prepare for a tough summer.”
On the eve of learning about European support tools, the Greek official recalled that Europe already has significant national refining capacity. 70% of jet fuel is produced in Europe and the remaining 30% is imported, of which only half —15% of the total— comes from the Gulf region. To address this shortage, the EU is looking for alternative sources elsewhere in the world, specifically, how Type A fuel, the standard produced in the US, could be implemented in the old continent. For now, the final decision has not been made, but depends on technical evaluation.
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Tzitzikostas wanted to clarify that so far, “the routes or flights that have been canceled have not been due to a lack of jet fuel supply,” but “due to high prices.” Many routes that were “on the verge of being profitable” have ceased to be so because the price of fuel has risen so much. Brussels insists that there are no indications of widespread cancellations for the coming weeks, as 70% of jet fuel is produced internally in Europe.
The nuance is important. Because under current European rules, cancellations due to high prices “do not necessarily qualify as extraordinary circumstances,” so passengers retain their right to financial compensation if the airline decides to ground them if it is not profitable to fly due to the cost of jet kerosene. In contrast, if there were a real fuel shortage, this would be considered an “extraordinary circumstance,” which would exempt airlines from paying additional financial compensation.
“There is no need at this moment to intervene in how people live, work, or travel,” stressed the Greek commissioner. And he warned: “The only way out of this turmoil is through diplomacy; without a return to permanent freedom of navigation, the consequences will be catastrophic, not only for Europe, but for the entire world.”
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