No quick fix for Asian airlines even if Iran reopens Hormuz: IATA chief

The head of a body representing global airlines said on Wednesday that even if Iran reopened the Strait of Hormuz, it would take months for jet fuel supply to recover given disruptions to Middle East refining capacity.

Oil fell below US$100 per barrel after US President Donald Trump said he had agreed to a two-week ceasefire with Iran ‌that was subject to the immediate and safe reopening of the Strait of Hormuz, which normally carries about a fifth of the world’s oil trade.

Iranian Foreign Minister Abbas Araghchi said passage through the strait would be allowed under Iranian military management during the ceasefire. It was not clear whether that meant Iran would completely loosen its chokehold on the waterway.

Willie Walsh, director general of the International Air Transport Association, told reporters in Singapore that while he expected crude oil prices to fall, jet fuel costs were likely to remain slightly elevated due to the ⁠impact on refineries.

“If it were to reopen and remain open, I think it will still take a ‌period of months to get back to where supply needs to be, given the disruption to the refining capacity in the Middle East, which ‌is a critical part of the global supply of refined products, and not just ⁠jet fuel for ⁠other products as well,” Walsh said.