The unprecedented closure of the Strait of Hormuz—through which nearly 20 percent of the world's oil supply flows—has sent global jet fuel stockpiles plunging, depleting strategic reserves in the UK, Germany, and France, according to WIRED. The disruption has propelled conventional jet fuel prices higher, making sustainable aviation fuel (SAF) a more financially viable alternative for the first time in the industry's history.
Supply Disruption and Price Impact
The closure by Iran sent shockwaves through aviation fuel markets. Reports out of Europe indicated that fuel supply could run low by the end of June, reported WIRED. Vancouver-based aviation analyst Mark Miller, a commentator for CBC News, canceled his family's trip to Rome this summer due to the crisis. "The last thing we wanted to do is get stuck in Europe," Miller said. The supply shortage has spread to the US: on Thursday, an American Airlines spokesperson told USA Today that the carrier would temporarily suspend several domestic routes in August and September due to rising jet fuel prices.
SAF Economics Reach Parity
Conventional jet fuel now looks to be twice as expensive going into the summer travel season, according to Lauren Riley, chief sustainability officer for United Airlines. "That makes SAF look like a more competitive alternative financially. In fact, it’s the closest to parity we’ve ever seen," Riley said. "This is the first time in my career that we’re actually having conversations about it." SAF can cut emissions by up to 80 percent but costs two to five times the price of regular jet fuel under normal conditions. United Airlines, Delta, American, and Cathay Pacific are among the carriers now using SAF.
Production Bottlenecks and Industry Response
US conglomerate World Energy began converting agricultural waste, fats, oils, and greases into SAF at its production facility in Paramount, California in 2016, becoming the fuel's first commercial-scale producer. "There's hardly any difference downstream of the treatment process and the blending process," said Joseph Ran, vice president of asset optimization for World Energy. "You just add an additional blending step of mixing the SAF and the fossil fuel." However, bottlenecks such as scarcity of raw materials called feedstocks, complex infrastructure, and expensive production processes have kept the industry’s use of SAF below 1 percent of total global jet fuel consumption. World Energy ended SAF production last year "as part of an overall effort to better focus company resources," according to a company spokesperson.
Demand Surge and Outlook
Before the blockade, the summer of 2026 was shaping up to be a post-Covid comeback for commercial aviation, with the FIFA World Cup, America's semiquincentennial celebrations, and Harry Styles' world tour driving unprecedented demand. The crisis has highlighted the need for alternatives. "The closing of the strait has been a very vivid example of overreliance on a single commodity," said Scott Lewis, president of World Energy’s Net-Zero Services group. In April, United formed a consortium with Microsoft, DSV, and a Houston-based multinational energy company to advance SAF.
| Metric | Conventional Jet Fuel | Sustainable Aviation Fuel (SAF) |
|---|---|---|
| Price relative to conventional (normal) | 1x | 2–5x |
| Price relative to conventional (current) | 2x | ~1x (at parity) |
| Emissions reduction | — | Up to 80% |
| Share of global jet fuel use | ~99%+ | <1% |
The summer travel season will test whether the price convergence can spur a lasting shift toward SAF, but feedstock and infrastructure constraints remain significant hurdles.
