Australia’s airlines could run short of jet fuel as soon as June if key South Korean exporters move to limit supply, warns Macquarie University academic Lurion De Mello.
The worries over dwindling fuel supply have already prompted Qantas to axe 1 in 20 domestic flights over May and June, with Virgin Australia also cancelling flights in part due to jet fuel costs doubling since February 2026.
The ongoing chaos is unfolding as the US and Iran fail to reach a peace deal to reopen the Strait of Hormuz shipping passage, which transits around 20 per cent of the heavy sour crude oil that is refined into jet fuel at mainly Asian refineries across China, South Korea, Singapore and Malaysia.
On March 12, China banned all jet fuel exports other than to Hong Kong to preserve its own supplies and Mr De Mello warned Australia is now heavily reliant on South Korea to keep its commercial planes in the air over June and beyond.
On Thursday, Prime Minister Anthony Albanese held a national Cabinet, telling State leaders Australia’s fuel reserve is now 46 days worth of petrol, 10 more than when the Iran war began.
“We’re in deeply tumultuous and turbulent global times, and people are aware of that, and can see that that is the case. We are doing what we can to alleviate this issue,” Mr Albanese said after the meeting.
This week Virgin Australia suggested it’s uncertain about aeroplane fuel supplies beyond May 2026 as suppliers had not provided assurances beyond then.
“Jet fuel is the really critical shortage now, not diesel or petrol we have plenty of supply of that,” said Mr De Mello. “Jet fuel isn’t stored in mass quantities like petrol or diesel. It’s usually stored around airports, so every time there’s a disruption it’s the biggest problem.
“We won’t run out overnight, but if Hormuz remains constrained for weeks, the risk is really big. Looking at the data now we’re OK until mid-May and you can cut (airline) capacity, but Australia is heavily reliant on South Korean refineries and if it caps exports we’re definitely getting trouble.”
Global scramble
As of Thursday afternoon, three tankers from South Korea are set to deliver around 850,000 barrels of jet fuel to Australian ports up until shipping data available out to May 15. All three tankers are arriving from South Korean refineries, with a typical sailing time of around two weeks, according to Mr De Mello, an expert in energy economics.
“Traditionally, Australia gets its jet fuel from South Korea, but in April we got it from Taiwan and Malaysia as well. China has cut off all supply now. Korean Air has cut back flights, so that’s a worry, but we don’t know what the Koreans might decide in the future.”
Benchmark Brent Crude prices traded up 2 per cent to $US103.32 a barrel on Thursday, as the deadlock between the US and Iran showed little sign of abating.
Earlier in April, the Head of the International Energy Agency, Dr Fatih Birol, warned Europe likely has just six weeks supply of jet fuel left, as the continent also relies heavily on the Gulf region.
Fuel typically ranks as the second-largest expense for airlines after labour and many global airlines have cut flights as a result of surging costs.
On Tuesday, Environment Minister Murray Watt told Sky News that he “can’t predict what the future is going to hold” about jet fuel supplies. However, he suggested there would be more consequences from the disruption of global fuel networks.
“We’ve already seen our domestic airlines make some changes around their flight routes,” he warned.
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