Fears about the impact of price hikes linked to the war in Iran wreaking havoc on upcoming holidays shot up after the world's energy watchdog issued its stark warning. Oil benchmark Brent crude jumped 5% to $94.72 a barrel this morning following the fresh closure of the Strait of Hormuz, after tumbling on Friday when Iran declared the shipping route open. The International Energy Agency warned that Europe may only have six weeks' worth of jet fuel remaining.
The 2026 Iran war began with coordinated airstrikes by the United States and Israel on Iran in February 2026. Iran has threatened to block or disrupt shipping routes in the Strait of Hormuz. Nearly one-fifth of the world's oil supply passes through the Strait of Hormuz.
Oil and gas prices have surged in Europe due to the Middle East conflict. Benchmark Dutch TTF natural gas futures have jumped nearly 80% over the past month, while Brent crude futures have surged by more than 40%. Around 60% of European power prices are linked to natural gas. The OECD cut its euro zone growth forecast for this year to 0.8% and raised its inflation outlook to 2.6%. High energy prices are slowing the green transition due to rising capital costs and inflation.
A major European airline has issued an update to travelers concerned about the impact of jet fuel shortages on their upcoming journeys. A spokesperson for the German Lufthansa Group reassured passengers that strong fuel reserves have put it 'in a better position' than many competitors. Other major airlines have issued similar messages to worried customers amid the ongoing turmoil, including Jet2, which told users on X that all flights are planned to go ahead as normal over the next two months.
With this level of hedging, we are in a better position than most competitors.
Lufthansa Group is accelerating its corporate strategy due to sharply rising kerosene prices and labor disputes. Lufthansa will permanently withdraw all 27 operational aircraft of Lufthansa CityLine starting the day after tomorrow. Lufthansa will reduce long-haul capacity by six intercontinental aircraft at the end of the summer schedule, including retiring four Airbus A340-600s in October and grounding two Boeing 747-400s for winter. Lufthansa plans further capacity reductions equivalent to five aircraft in the 2026/27 winter timetable.
For the current calendar year 2026, approximately 80% of Lufthansa's fuel needs are already secured through prior forward contracts. Around 80% of Lufthansa Group's fuel consumption is hedged based on crude oil prices. Lufthansa Group has temporarily suspended its hedging strategy for kerosene costs due to record prices from the Middle East conflict. Lufthansa's measures will reduce its unhedged fuel purchases by approximately ten percent.
Lufthansa aims to reduce 4,000 administrative positions by 2030. Lufthansa has extended alternative employment offers to all employee groups of Lufthansa CityLine. These labor and administrative changes are part of a broader restructuring effort.
The update from airlines followed fresh uncertainty over the situation in the Middle East, as the US seizure of an Iranian cargo ship caused oil prices to rise again on Monday. Other major airlines have issued similar messages to worried customers amid the ongoing turmoil.
This is for the time being. We have not made any forecast for the upcoming months yet.
Global supply losses have reached nearly 12 million barrels per day. Several Asian countries are reassessing their energy strategies, with some accelerating nuclear energy efforts.
Iran has halted petrochemical exports following Israeli strikes on key facilities.
Kerosene prices have more than doubled compared to pre-Iran war levels.
The exact timeline and impact of Lufthansa's fleet reductions on passenger travel and routes remain unclear, as do specific measures European governments are taking to secure jet fuel supplies beyond the six-week warning. It is unknown how many flights have been canceled or are at risk of cancellation due to fuel shortages, and whether other major airlines besides Lufthansa, Jet2, TUI, and easyJet are implementing similar hedging or operational changes.
The current status of the Strait of Hormuz—whether it is open, closed, or partially disrupted—and how this is affecting fuel shipments also remains uncertain. The broader airline industry is facing significant uncertainty amid the energy crisis.