Dhl Expects Jet Fuel Supplies Into June for Europe, but Has Doubts Over Asia

DHL Expects European Jet Fuel Supply Through June, Uncertainty for Asia

Jet Fuel Supply Outlook and Regional Challenges

By Philip Blenkinsop

BRUSSELS, April 21 (Reuters) - German logistics company DHL Group is confident it can secure jet fuel for its planes in Europe into June, but has less certainty about supply across Asia, its chief executive said on Tuesday.

European Jet Fuel Supply Situation

The International Energy Agency said a week ago that physical shortages of jet fuel could begin in Europe by June due to the disruption caused by the Iran war, given Europe's heavy reliance on imports from the Middle East. The European Commission will set out emergency plans on Wednesday.

Current Status and Future Projections

"So far, we have no shortages or indication of shortages with the suppliers we work with, but especially in Asia, the visibility is quite limited," Tobias Meyer told a group of reporters in Brussels. He said China had significant strategic reserves, but that other countries in the region had less back-up.

Commitments from Oil Majors

COMMITMENTS FROM OIL MAJORS

Meyer, whose company operates almost 300 planes, said that for European airports, DHL had "visibility and commitments" from oil majors into May and June.

"What happens beyond this is hard to forecast, but the problem seems to be more severe in Asia than in Europe... For Europe, we get two to four weeks more assurance," he said.

Impact of Middle East Conflict on Air Traffic and Demand

The Iran war and related disruption of air traffic in the Middle East had, said Meyer, led to more demand for DHL because Gulf carriers had reduced their operations.

Increased Demand for DHL Services

"That capacity now is absorbed by carriers like us who fly directly Asia-Europe, so for instance Singapore-India-Europe is a route that we serve. For us, there's more demand not less," he said.

Market Risks and Supply Chain Concerns

Meyer said risks of shortages may not be sufficiently priced into the market and that problems could persist even if the Strait of Hormuz were completely re-opened to traffic. 

Oil Transit and Refinery Impact

Oil typically takes three to six weeks to travel from the oil well to refineries, meaning refineries are only just starting to feel the full impact of the closure of the Strait, which followed U.S.-Israeli strikes first launched on Iran at the end of February.

(Reporting by Philip Blenkinsop; editing by Barbara Lewis)