The conflict in Iran is revealing loopholes in the energy security of the world aviation industry. Pressure is increasing as the US begins to control shipments through the Strait of Hormuz - a bottleneck accounting for 20% of global oil supplies.
According to the International Air Transport Association (IATA), the price of jet fuel (Jet A-1) reached nearly $198/barrel in early April, double that of the period before the conflict broke out.
In Southeast Asia, many airlines are having to review the entire route network to preserve costs. Philippine Airlines announced the suspension of many international routes to await improved conditions.
Further markets such as New Zealand and Australia are no exception when Air New Zealand and Jetstar announced a 4% to 12% reduction in flights, directly affecting the travel plans of thousands of passengers.
Expert Rajiv Biswas from Asia-Pacific Economics said that this region is particularly vulnerable due to excessive dependence on oil tankers from the Middle East. The countries most heavily affected are those lacking long-term strategic energy reserves.
Meanwhile, potential suppliers in Asia are prioritizing domestic demand by restricting exports, making the fuel thirst in neighboring countries even more severe.
Conversely, Japan is a rare country that maintains stability thanks to owning the world's largest strategic oil reserves and strong domestic fuel processing capabilities.
This country currently operates a huge national oil reserve system at stations such as Shibushi and Kamigoto, with the ability to maintain economic activity for more than 200 days even when international supply is completely cut off.
This preparation allows major Japanese airlines such as Japan Airlines (JAL) and All Nippon Airways (ANA) to maintain stable flight schedules. In addition to reserves, Japan also possesses strong on-site refining capabilities, helping them proactively turn reserved crude oil into jet fuel without relying on oil refineries abroad.
However, the situation in Southeast Asia and Australia is alarming as these regions import up to 80% of fuel but the domestic oil refining capacity is very limited.
To respond, countries are starting to survey alternative shipping routes outside the Strait of Hormuz, although supply chain restructuring may take years.
