The blockage of the Strait of Hormuz, triggered by the ongoing Iran conflict, has choked one of the world's most critical energy chokepoints. Roughly 30% of all seaborne crude oil passes through the strait, according to the US Energy Information Administration. For the UK, the exposure is significant: Department for Energy Security and Net Zero data indicates that Middle Eastern crude accounts for approximately 25–30% of feedstock processed at UK refineries, with a substantial share refined into aviation kerosene at facilities including Fawley in Hampshire and Stanlow in Cheshire.
The result is a supply crunch that extends well beyond consumer holidays. Freight-reliant SMEs, tourism operators, corporate travel buyers and logistics firms face higher input costs, schedule uncertainty and, potentially, government-directed rationing of flight capacity.
How thin are UK fuel reserves, and what happens when they run out?
Earlier this month, major UK carriers warned they hold only five to six weeks of jet fuel supplies, as reported by City AM. That buffer is narrower than it appears. Airlines do not hold fuel centrally; reserves are distributed across airport hydrant systems and tank farms, meaning individual airports can run dry faster than the national average suggests.
The financial pressure is already acute. IAG (LSE: IAG), the parent of British Airways, has confirmed it will hike fares to "reflect higher fuel costs," according to the company. Fuel typically represents 25–30% of IAG's operating expenses, so even a moderate supply-driven price spike feeds directly into ticket prices and, by extension, corporate travel budgets.
easyJet (LSE: EZJ) has forecast a loss of up to £560 million, with a single fuel purchase alone adding a £25 million hit to its bottom line, as the carrier disclosed earlier this month. easyJet had hedged a portion of its fuel requirements before the crisis, but the scale of the price move has overwhelmed those positions.
Wizz Air (LSE: WIZZ) has cut profit guidance by approximately €50 million since the conflict began, taking its forecast to a €25 million loss, according to City AM. Short sellers have increased positions in the stock since hostilities broke out.
Jet2, the leisure carrier, has so far refused to impose surcharges. Its chief executive, Steve Heapy, said holidaymakers "have every right" to enjoy their holidays without being hit by extra costs, as reported by the Independent. However, the company acknowledged that fears around travel disruption are causing customers to book trips at the last minute, compressing the booking window that airlines rely on for revenue visibility.
For UK businesses, the risk is not abstract. If reserves are not replenished and carriers begin cancelling flights, the knock-on effects will cascade through supply chains. UK air-freight volumes, which the Civil Aviation Authority estimates at over 2.5 million tonnes annually, underpin time-sensitive sectors: pharmaceutical cold-chain logistics, perishable food imports, and e-commerce fulfilment for SMEs that depend on next-day delivery from continental hubs.
Jet A vs Jet A-1: what the regulatory workaround actually means
The UK government is poised to announce that airlines may use Jet A fuel, the specification standard in the United States, as an alternative to Jet A-1, the grade mandated across Europe and most of the world. The proposals were first reported by the i Paper.
The technical difference is narrow. Jet A-1 has a freezing point of −47°C; Jet A freezes at −40°C. Both fuels meet the same combustion, thermal stability and density requirements. In practice, the higher freezing point of Jet A is only a concern on ultra-long-haul polar routes where fuel in wing tanks can be exposed to extreme cold for extended periods. For the short- and medium-haul routes that dominate UK airline schedules, the risk is negligible.
The change has never been enacted in the UK before, but it is not without precedent internationally. US carriers have operated exclusively on Jet A for decades without incident. Aircraft manufacturers, including Boeing and Airbus, certify their engines to run on both specifications.
The practical benefit is access. The US is a major refiner and exporter of Jet A. Opening UK airports to that specification widens the pool of available supply at a time when Jet A-1 cargoes from Middle Eastern and Asian refineries are stranded or rerouted. For airlines, it could ease spot-market pricing pressure and reduce the likelihood of outright fuel shortages at individual airports.
For SME operators in the aviation supply chain, the regulatory shift introduces a logistical consideration. Airport fuel-farm operators, into-plane service providers and quality-assurance laboratories will need to handle and certify a second specification. The compliance burden is modest but real, particularly for smaller operators at regional airports.
Winners and losers if slot rules are relaxed
The second regulatory lever under consideration is a relaxation of airport slot-use rules. Under the current 80/20 "use-it-or-lose-it" rule, airlines must operate a slot at least 80% of the time during a scheduling season to retain the right to that slot in the following equivalent season. The rule, administered in the UK by Airport Coordination Limited, is designed to prevent slot hoarding and ensure efficient use of scarce runway capacity.
The government suspended the rule during the Covid-19 pandemic, granting carriers temporary relief as passenger numbers collapsed. That precedent is now being invoked again. Ministers have indicated they could soften the threshold to allow airlines to cancel flights without forfeiting slots, cushioning the impact of the fuel crisis.
Gerald Khoo, an analyst at Panmure Liberum, noted that airlines have been "reluctant" to slash flight capacity so far.
"We suspect that many airlines are hoping for a quick and clear resolution to the Iran crisis. They certainly do not want to be short of capacity if the source of the headwinds to demand, fuel costs and fuel supply suddenly disappear."
The concern for smaller carriers and regional airports is that any government-directed reduction in capacity would not be evenly distributed. Khoo suggested that if governments allow flight capacity to fall, they may end up dictating which flights are cancelled and which are not.
"We suspect that major hub airports, and their national flag carrier residents, would be likely to be prioritised," Khoo said, as reported by City AM.
That dynamic would concentrate cuts on routes served by smaller airlines from regional airports. For SMEs in cities such as Birmingham, Bristol, Edinburgh and Newcastle, the loss of direct services to European business destinations could force a return to indirect routings through Heathrow or Gatwick, adding cost and time.
Darren Jones, chief secretary to the prime minister, said on Sunday that higher flight prices could persist for as long as eight months after the conflict ends, as reported by City AM. Prime Minister Keir Starmer told Sky News that consumers "might change their habits… where they go on holiday this year, what they're buying in the supermarket."
What UK business operators should be planning for now
The immediate planning horizon for affected businesses breaks into three categories: cost management, supply-chain resilience and scenario planning for schedule disruption.
Cost management
Corporate travel buyers should expect fare increases to persist through the summer season at minimum. IAG's decision to pass through fuel costs sets a benchmark. Airlines that absorb costs now, as Jet2 is attempting, may not sustain that position if the crisis extends. Businesses with material travel spend should review whether fixed-price travel-management agreements offer any contractual protection, and budget for a 15–25% uplift in average ticket prices based on the fuel-cost pass-through implied by IAG's statements.
Supply-chain resilience
SMEs that depend on air freight for inbound components, perishable goods or time-critical e-commerce fulfilment face the sharpest operational risk. Pharmaceutical distributors, fresh-produce importers and direct-to-consumer brands sourcing from continental Europe should identify alternative surface-freight options now. The Channel Tunnel and ferry operators have spare capacity on most routes, though transit times are longer and cold-chain integrity requires separate verification.
Schedule disruption
If slot rules are relaxed and airlines begin cutting frequencies, the impact will not be uniform. Routes with lower load factors and weaker yield profiles will be cut first. For businesses based near regional airports, this means monitoring airline schedule filings closely and building contingency around alternative departure points.
The fuel-specification change, if enacted, should ease the supply picture within weeks rather than months, given the availability of US-refined Jet A on the global market. But it is a palliative, not a cure. Until the Strait of Hormuz reopens to normal traffic, UK aviation and the businesses that depend on it face a period of constrained capacity, elevated costs and regulatory improvisation.
