Britain faces the potential of having to ration jet fuel due to shortages resulting from the Iran conflict, according to an expert’s warning. The dwindling supplies could reach critically low levels, raising concerns for Europe’s jet fuel market and its impact on summer travel. Airlines like KLM and Lufthansa have already taken preemptive measures by canceling flights due to fuel-related apprehensions.

Goldman Sachs, a prominent global investment bank, highlighted the severe tightness in the market caused by the ongoing closure of the Strait of Hormuz. The UK is particularly vulnerable due to its limited reserves, high dependence on imports, and constrained refining capabilities. As a result, the possibility of implementing rationing measures to support the travel industry is being contemplated.

Since the conflict began on February 28, jet fuel prices have doubled, prompting warnings from Keir Starmer about the need for travelers to reconsider their holiday plans. The UK, being Europe’s largest net importer of jet fuel without strategic reserves, relies heavily on commercial inventories as a buffer. The risk of inventories, especially in the UK, dropping to critically low levels has heightened the likelihood of rationing.

With the Gulf region supplying a significant portion of globally traded fuel, Europe’s reliance on these flows has led airlines to seek alternative sources, driving prices higher. The UK, lacking strategic reserves and heavily relying on commercial inventories, faces the potential of dangerously low fuel levels, raising the specter of rationing.

Any prolonged fuel shortage could force airlines to cancel or consolidate flights while pushing ticket prices up, given that fuel accounts for a significant portion of airline operating costs. Companies like IAG and Air France anticipate substantial increases in their fuel bills, which are expected to translate into higher fares and reduced passenger amenities.

Despite UK ministers’ reassurances about alternative supply sources, industry experts are less optimistic. Ryanair’s CEO has expressed the urgent need to cancel flights, a move that could commence within weeks. Fuel suppliers have cautioned about the UK’s limited visibility in jet fuel supply within Europe due to its reliance on Middle Eastern imports.

Amidst high uncertainty, the European Commission plans to issue guidance to airlines, preparing for various scenarios. Analysts have also cited the UK’s diminished refining capacity following refinery closures, underscoring concerns about import dependence.

A report from the Tony Blair Institute has pointed out that Europe’s energy policies, focusing on climate change, have contributed to higher fuel prices and increased import reliance. While May demand is projected to remain manageable, disruptions could arise by mid-to-late June if the Strait of Hormuz remains closed.