Warning UK is at dire risk of rationing jet fuel due to shortages caused by Iran war

Britain is at risk of rationing jet fuel due to shortages stemming from the Iran conflict, an expert has claimed. With supplies potentially dropping to "critically low levels", concern has grown for Europe’s jet fuel market and the consequences this will have on travel this summer. Some airlines, such as KLM and Lufthansa, have already cancelled flights due to fears about fuel. Now, Goldman Sachs, one of the world’s largest investment banks, has said the ongoing closure of the Strait of Hormuz has created “extreme tightness” in the market and the UK is especially exposed due to its limited stockpiles, heavy reliance on imports, and constrained refining capacity. It means the prospect of rationing is believed to being considered to help sustain the travel sector. Jet fuel prices have doubled since the war began on February 28, prompting bleak warnings from Keir Starmer that travellers may need to rethink their holiday plans . Goldman Sachs said in a research note: "The UK is the largest net importer of jet fuel in Europe, and it holds no strategic reserves, leaving commercial inventories as the primary buffer. As a result, inventories in some countries, especially the UK, could fall to critically low levels, increasing the likelihood of rationing measures." The Gulf region supplies around one-fifth of globally traded fuel, and with Europe heavily dependent on those flows, airlines are now competing for alternative sources — driving prices even higher. According to The Times , Goldman Sachs noted that the UK, as Europe’s largest net importer of jet fuel, lacks strategic reserves and relies primarily on commercial inventories as a buffer. Those levels, particularly in Britain, could fall dangerously low, increasing the likelihood of rationing. Any sustained shortage would likely force airlines to cancel or consolidate flights while pushing ticket prices upward. Fuel accounts for as much as a quarter of airline operating costs. IAG, the parent company of British Airways, has already indicated it will raise fares to offset higher fuel expenses, acknowledging it is “not immune” to ongoing volatility despite hedging strategies. Air France expects its jet fuel bill to rise by $2.4billion (£1.77million) this year, while American Airlines anticipates an increase of more than $4billion (£2.96million) — costs that are expected to translate into higher fares and reduced perks for passengers. Although UK ministers have suggested supplies can be sourced from elsewhere, industry figures are less optimistic. Ryanair chief Michael O’Leary said airlines are “desperately” looking for flights to cancel and could begin doing so within weeks. Fuel suppliers have also warned that the UK has the “most limited visibility” in Europe when it comes to jet fuel supply, largely because of its dependence on Middle Eastern imports. The European Commission said it would issue guidance to airlines this week, with a spokesperson noting that uncertainty remains high and preparations are being made for multiple scenarios. Analysts also pointed to the UK’s reduced refining capacity following the closure of the Grangemouth refinery — Scotland’s only oil refinery — last April. Concerns had also surrounded the future of the Prax Lindsey refinery in north Lincolnshire, though its new owner, Phillips 66, said the recent acquisition should help stabilise supply. A report from the Tony Blair Institute argued that Europe’s climate-focused energy policies have contributed to higher prices — two to three times those of competitors — and increased dependence on imports. Fuel suppliers said May demand should remain manageable but warned that disruptions could begin by mid-to-late June if the Strait of Hormuz remains closed.