The war-driven closure of the Strait of Hormuz is rippling across the global economy with mounting force, as physical fuel prices surge far above crude oil benchmarks, airlines slash tens of thousands of flights, and governments from Manila to Canberra scramble to secure dwindling supplies.
Jet fuel markets have decoupled from crude oil futures, with physical prices climbing to levels rarely seen in the history of commercial aviation. In Singapore, jet kerosene peaked at an all-time high of $240.50 per barrel on March 4, a 114% increase since the conflict began, according to Argus Media. Delivered prices to Northwest Europe have nearly doubled to over $210 per barrel, also an all-time record. Asian jet fuel prices remain near $200 per barrel.
Countries Declare Emergencies as Supplies Tighten
The crisis has forced national-level responses across Asia and the Pacific. Philippine President Ferdinand Marcos Jr. declared a national energy emergency on Tuesday, noting the country has only about 45 days of fuel reserves and imports 90 percent of its oil from the Middle East. The executive order authorizes the government to make advance payments to secure fuel contracts and crack down on hoarding and profiteering.
Bangladesh raised jet fuel prices by 80 percent — its second revision this month — increasing domestic jet fuel costs from 112.41 to 202.29 taka per liter. In Australia, Energy Minister Chris Bowen revealed that hundreds of fuel stations across the country had run out of at least one fuel type, with 289 stations affected in New South Wales alone and over 100 in Victoria, driven largely by panic buying rather than supply shortfalls.
The International Energy Agency has described the crisis as “the largest supply disruption in the history of the oil market,” with roughly 20 percent of global oil supply cut off. The agency coordinated a record release of 400 million barrels of emergency reserves among its 32 member countries on March 11, and IEA Executive Director Fatih Birol said the agency still has “over 1.4 billion barrels remaining, which means we can do more later, as and if needed”. Maritime traffic through the Strait has fallen by more than 95 percent from pre-crisis levels, according to the United Nations, with Iran continuing attacks on merchant vessels nearly a month after U.S.-Israeli strikes on Iran triggered retaliatory action.