Oil Price Crisis | IATA expects it will take months to restore airline fuel supply

The International Air Transport Association (IATA) Director General Willie Walsh said that, given that Middle East refining capacity has been affected, even if Iran reopens the Strait of Hormuz, it would still take several months to restore aviation fuel supplies.

Walsh said that although oil prices are expected to fall back, refining plants have been affected by the conflict, and aviation fuel costs may still remain at relatively high levels.

He pointed out that the Middle East is not only crucial for aviation fuel, but also a key link in the global supply of other refined products. Given that refining capacity has been damaged, even if the strait is reopened and remains clear, it will still take several months to recover to the required supply levels. If crude oil supply resumes, it is estimated that both China and South Korea will restart product oil exports.

He said that therefore, once crude oil transportation is restored, there will be refining capacity available, but it will take some time. Moreover, with the current crack spread still at a high level, this will provide motivation for refineries to increase aviation fuel output.