UK Jet Fuel Rationing Risks Emerge As Goldman Warns Of "Extreme Physical Tightness"
Brent crude futures briefly tumbled below $100 a barrel on Wednesday morning after an Axios report indicated the Trump administration and Tehran were working toward a one-page memorandum of understanding to end the war and reopen the Strait of Hormuz.
Still, any near-term peace deal would not immediately normalize the badly fractured global energy supply chains. Crude products markets remain physically tight, and the damage from months of disrupted tanker flows will take time to unwind. Some countries may already be entering a critical point, with jet fuel and diesel inventories at risk of being drawn down to dangerously low levels in the months ahead.
Goldman analysts, led by Michele Della Vigna, warned about diesel and jet fuel availability in Europe ahead of the summer months, noting that "extreme physical tightness in summer/early autumn" is a scenario they are forecasting.
"We believe jet fuel prices in Europe will need to remain elevated to redirect cargoes from other regions, covering 50% of the shortfall in disrupted volumes from the Middle East through Hormuz and from Asian exporters no longer exporting to Europe," Della Vigna told clients.
Della Vigna, the head of EMEA natural resources research at Goldman, pointed out that "some countries (the UK in particular) could end up with extremely low inventories, and it's possible that rationing measures would be put in place to slow inventory draw."
Readers have been well informed about the looming jet fuel crisis set to hit Europe this summer (read here & here & here & here), as well as JPMorgan's March take on how the energy crisis is spreading across regions (read here).
As we detailed on Tuesday, President Trump's push to reopen the Hormuz chokepoint at the start of the week likely reflects the beginning of a one-month countdown to accelerated energy chaos if the critical waterway is not reopened. The risk is no longer confined to crude markets. Prolonged disruption through Hormuz is spreading into refined-product supply chains, with Europe's jet fuel and diesel inventories facing the brunt of physical tightness heading into summer and early autumn.
Della Vigna estimated that Europe faces a gross jet fuel loss of about 500,000 barrels a day from Gulf-area exporters and Asian tankers transiting Hormuz, and assumes that half of that shortfall can be offset by redirected U.S. and West African energy flows, leaving a net loss of approximately 250,000 barrels a day. For diesel, he assumes the full 220,000 barrels-a-day loss is absorbed by European stocks.
Exhibit 3: We estimate a gross jet fuel loss of c.500 kb/d from Middle East Gulf and Asian exporters and we show the sensitivity to different % of exports subtitutions coming from other regions
He singled out the UK as having the highest-risk jet fuel market because it is Europe's largest net importer of jet fuel, at about 195,000 barrels a day, and lacks proper reserves. He warned that UK commercial stocks could fall below 10 days of cover by midsummer, raising the risk of rationing, which in turn would impact commercial flights.
Della Vigna continued:
Under our commodities teams' base case (Gulf normalization in June), we see European jet fuel inventories - on commercial stocks alone, excluding government emergency reserves - falling to the IEA's critical 23-day shortage threshold by end-May and breaching it in June, slightly more aggressive than the IEA's own assessment as we account for the disruption of Asian-origin cargoes transiting the Strait.
Under an adverse scenario (normalization delayed to July), stocks could be depleted entirely by year-end (Exhibit 1). Diesel faces a more gradual erosion given lower ME import dependence.
At the country level, the UK appears most at risk of rationing (Exhibit 4), with commercial stocks falling below 10 days of cover by mid-summer given high starting import dependence and no government reserves. Net exporters such as the Netherlands and Greece are more insulated but would still be affected through higher prices.
Exhibit 1: Jet Fuel is the tightest oil product market
Exhibit 4: For jet fuel, the UK is most at risk with low inventories and high reliance on imports
To offset losses, Europe has drawn in more jet fuel and barrels from Nigeria's Dangote refinery, but Della Vigna said prices will need to remain elevated to redirect even more tankers to the energy-stricken continent.
Bloomberg's Javier Blas notes, "US refiners are going gangbusters trying to solve the global jet-fuel shortage (and to cash in record high margins)."
CHART OF THE DAY: US refiners are going gangbusters trying to solve the global jet-fuel shortage (and to cash in record high margins).
— Javier Blas (@JavierBlas) May 6, 2026
The chart shows seasonal jet-fuel output from 2000-to-date (2026 is top line in blue). The bottom outliers are 2020 and 2021 during Covid. pic.twitter.com/fllcX6EM5y
On the topic of airlines, he said carriers on the continent have already slashed summer capacity by low single digits, while Middle East schedules have been reduced by high double digits through late June.
Exhibit 8: Low single-digit capacity cuts on EU short-haul post conflict
Exhibit 9: Similar cuts on Transatlantic capacity
It's clear Europe has a jet fuel problem. And this won't be solved by Brussels' weird obsession with 'green' energy.
Professional subscribers can read the full "Stress testing European jet fuel and diesel availability this summer" at our Marketdesk.ai portal.