Iran war: The jet fuel crunch point is only weeks away
Friday, 17 April 2026
New Zealand might not have enough jet fuel available to refuel foreign carriers for their return trip from next month - and at the least, it might mean airlines coming from a distance may cut their schedules to this country, an Australian energy markets specialist says.
Macquarie University economist Lurion De Mello told The Post he’d expect some airlines to cut flights here “because they don't want that plane stuck in New Zealand”.
But as it stands, currently New Zealand has 47 days of jet fuel supply, of which 21.3 days is in the country and the remainder is on ships.
Board of Airlines Representative New Zealand (Barnz) executive director Cath O’Brien couched a similar sentiment differently, saying with fuel prices were likely to remain higher for quite a long time, airlines would have to look at fares to ensure routes remained commercially viable.
Airlines were planning for the coming northern winter season in what is a very volatile environment where fuel costs were higher and it was unclear for how long, she said.
It was also not clear how long the conflict in the Middle East would last, the extent of the of the damage to fuel infrastructure in the region and the interruption of the shipping lanes for jet fuel.
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That all played to customer demand for travel and how people felt about travelling in such an environment. Airlines would lock in their services over May and June for the next summer and would be committed to flying 80% of the those services to secure their rights for the future.
Though most carriers that came from as far away as the Middle East had flown here for a long time, and were committed to the route, they also had to carry a lot of fuel to get here at greater expense. They had had a number options to manage services to New Zealand, including reducing frequency, use smaller aircraft or add a stop over in Australia, O’Brien said.
An Auckland Airport spokesperson told The Post that in the short term, carriers were making tactical changes to manage through the conflict, trimming capacity, consolidating flights and adjusting airfares.
Emirates had resumed flying to Auckland after some of its flights were grounded in the early phase of the war. Neighbouring Qatar Airways, which had been grounded throughout the conflict, has announced plans to resume daily flights to Auckland in June, the spokesperson said.
And in Paris, International Energy Agency executive director Fatih Birol said on Thursday that Europe has “maybe six weeks or so” of remaining jet fuel supplies.
Over a longer time frame, airlines appear to be taking a measured approach and and at this stage are continuing to operate flights as scheduled.
“It is too early to speculate on whether capacity is going to be trimmed or not for next summer.”
Airlines were not making long-term capacity decisions at this stage, given the rapidly evolving conflict in the Middle East, the spokeperson said.
“The fundamentals that make this country one of the world's most sought-after travel destinations have not changed, and we expect continued strong interest from international carriers as the market finds its footing.”
Jet fuel supply
Jet fuel supply to New Zealand remained the critical underlying issue, and the industry received assurances from the Government this week that supplies were stable out to June.
Auckland Airport’s spokesperson said the business was “not aware there is any issue with New Zealand’s current fuel supply”.
But the supply of jet fuel from Singapore and South Korea is being affected at source. June Goh is a senior oil market analyst at Sparta Commodities in Singapore. She told The Post shipments of jet fuel from South Korea dropped in March by about half compared with the same time last year.
And, contrary to assurances that supplies were stable, South Korea had begun restricting the amount of fuel it exported to 2025 levels since March 13 after the US and Israeli strikes on Iran.
That meant countries such as New Zealand still had access to fuel, but because the refineries were running with reduced oil supply, “the amount of jet fuel that is coming out is also much less than before”, Goh said.
And there is more competition for that fuel: “I'm seeing Australia very actively using their LNG as trying to get a swap for products …. I don’t think New Zealand has that leverage, or at least not openly from what I can see. Australia is very actively trying to secure alternative barrels.”
Prime Minister Christopher Luxon earlier this month said Australia was “catching up” to New Zealand when it comes to securing fuel supply through Singapore.
Australian Prime Minister Anthony Albanese had been accused of being slow to react to the oil shock caused by Iran’s effective blockage of the Strait of Hormuz. He went on a whirlwind tour of tour of Asia to secure more supply and came away with three agreements in less than a week, and this morning announced he’d purchased two shipments of diesel — totalling 570,000 barrels — from Brunei and South Korea - the first of many similiar deals.
Goh said while Korea, Japan and Singapore were heavily reliant on crude oil from the Middle East, they were in talks for supply from other sources of oil to keep the refineries going.
“But the amount of crude that we're talking about to replace the Middle East crude is simply not enough to get from elsewhere,” she said.
Countries such as Korea and Japan had emergency stockpiles of crude oil that would allow their refineries to run for a bit longer. Before the start of the Iran War, Japan had 200 days of oil reserves, “so they are well placed to weather it a little bit longer,” Goh said.
But there would be some reservations about running down the reserves, not knowing how long the war would last, she said.
One week into the ceasefire and there did not appear to be a clear outcome from the talks, she said.
Price a concern
Aviation Industry Association chief executive Simon Wallace remained “comfortable, on behalf of the industry, that the supply is OK. The real problem that we've got now is price.”
The price of aviation fuels, including avgas, used by piston engine aircraft, had more than doubled and was hitting the entire aviation sector, including tourism, agricultural flying such as top dressing and spraying, as well as commercial flight schools, Wallace said.
The likes of small regional airlines and flight-seeing companies could add a fuel surcharge to passengers tickets, but flight schools were not allowed pass on the higher cost of fuel to their students. “We've got flight schools who have got fuel increases in the order of $50,000 a month, and they they are struggling to survive.”
Farmers were also starting to say they could no longer afford to hire aircraft to spray or topdress their farms .
“It is getting to the point where affordability is a real concern,” Wallace said.