#Last kerosene tanker on its way to Rotterdam: ‘When it runs out, you can’t fly anymore’
The last tanker carrying kerosene from the Middle East arrives in Rotterdam this weekend. The ship, the STI Supreme, is transporting nearly 90,000 tons of aviation fuel from Kuwait and marks the end of this supply route for the time being, writes the FD. According to Jeroen Groot, financial markets editor and co-author of the piece, the impact is significant. ‘This is, of course, an unprecedented situation. The entire oil and fuel market has been turned upside down.’
Europe depends on the Middle East for about half of its kerosene imports and has itself been experiencing a shortage for some time. ‘We don’t produce enough kerosene for ourselves anyway. We have always had a shortage. This supply is now disappearing and there isn’t really an alternative,’ says Groot. Attempts to import extra from the United States, for example, offer little relief. ‘In the US, they produce slightly more kerosene than they need themselves, so unless he (Donald Trump, ed.) himself no longer wants to fly, that isn’t going to happen.’
The consequences are already visible in the aviation sector. Airlines are seriously concerned about both the price and the availability of fuel. ‘Because if it runs out at some point, you obviously can’t fly anymore,’ says Groot.
Although some airlines are hedging against price increases, this appears insufficient in this situation. ‘Because there is such an extreme kerosene shortage right now, the price of kerosene has risen much more sharply than that of oil. For the airlines that hedged against the oil price, that hedge therefore no longer works.’
##Measures
Some airlines are already taking measures. For instance, Lufthansa announced it would ground fuel-guzzling aircraft, and Scandinavian Airlines had already canceled flights earlier due to high costs. According to Groot, there is a high probability that more airlines will follow suit. ‘Perhaps we will indeed reach the point where it is not only very expensive but also runs out. After all, I haven’t picked up any signals that much kerosene is still coming this way.’
According to him, the situation is developing like an ‘accident in slow motion’. This last tanker was still able to depart before major shipping routes were closed, but by now, the supply has effectively come to a standstill. ‘We are only just starting to see the real effects,’ says Groot. ‘The boss of Ryanair said the same thing yesterday: “Nobody can tell us anything, nobody is giving us guarantees for May and June”.’
That will ultimately have consequences for travelers as well. If the supply of kerosene drops further, prices will rise and flights will be cancelled. ‘If there isn’t enough supply and those stocks run low, demand will eventually have to go down.’
buzzsawdps on
Just have to bring a few gold bars when crossing the strait of Hormuz, no biggie
hfbvm2 on
You can buy directly from Iran. Oh no wait you cant because israel bombed their refineries in the morning. So a tit for tat means middle east might get lit up. Soon uhh maybe time to travel by ships and coal trains again
Kalagorinor on
I wouldn’t normally be grateful for something called STI Supreme.
4 commenti
Article:
#Last kerosene tanker on its way to Rotterdam: ‘When it runs out, you can’t fly anymore’
The last tanker carrying kerosene from the Middle East arrives in Rotterdam this weekend. The ship, the STI Supreme, is transporting nearly 90,000 tons of aviation fuel from Kuwait and marks the end of this supply route for the time being, writes the FD. According to Jeroen Groot, financial markets editor and co-author of the piece, the impact is significant. ‘This is, of course, an unprecedented situation. The entire oil and fuel market has been turned upside down.’
Europe depends on the Middle East for about half of its kerosene imports and has itself been experiencing a shortage for some time. ‘We don’t produce enough kerosene for ourselves anyway. We have always had a shortage. This supply is now disappearing and there isn’t really an alternative,’ says Groot. Attempts to import extra from the United States, for example, offer little relief. ‘In the US, they produce slightly more kerosene than they need themselves, so unless he (Donald Trump, ed.) himself no longer wants to fly, that isn’t going to happen.’
The consequences are already visible in the aviation sector. Airlines are seriously concerned about both the price and the availability of fuel. ‘Because if it runs out at some point, you obviously can’t fly anymore,’ says Groot.
Although some airlines are hedging against price increases, this appears insufficient in this situation. ‘Because there is such an extreme kerosene shortage right now, the price of kerosene has risen much more sharply than that of oil. For the airlines that hedged against the oil price, that hedge therefore no longer works.’
##Measures
Some airlines are already taking measures. For instance, Lufthansa announced it would ground fuel-guzzling aircraft, and Scandinavian Airlines had already canceled flights earlier due to high costs. According to Groot, there is a high probability that more airlines will follow suit. ‘Perhaps we will indeed reach the point where it is not only very expensive but also runs out. After all, I haven’t picked up any signals that much kerosene is still coming this way.’
According to him, the situation is developing like an ‘accident in slow motion’. This last tanker was still able to depart before major shipping routes were closed, but by now, the supply has effectively come to a standstill. ‘We are only just starting to see the real effects,’ says Groot. ‘The boss of Ryanair said the same thing yesterday: “Nobody can tell us anything, nobody is giving us guarantees for May and June”.’
That will ultimately have consequences for travelers as well. If the supply of kerosene drops further, prices will rise and flights will be cancelled. ‘If there isn’t enough supply and those stocks run low, demand will eventually have to go down.’
Just have to bring a few gold bars when crossing the strait of Hormuz, no biggie
You can buy directly from Iran. Oh no wait you cant because israel bombed their refineries in the morning. So a tit for tat means middle east might get lit up. Soon uhh maybe time to travel by ships and coal trains again
I wouldn’t normally be grateful for something called STI Supreme.