Chevron CEO warns aviation strain could worsen as jet fuel crunch deepens
Fox Business • • business
Key Points:
- Chevron CEO Mike Wirth warned that jet fuel supplies are tightening rapidly due to disruptions linked to the Iran war, causing strain on the aviation industry that is expected to worsen in the coming weeks.
- Jet fuel prices in the U.S. have surged from about $2.50 to $4.19 per gallon since the conflict began, driven by constrained shipping through the Strait of Hormuz, a key oil transit route.
- Airlines like United and Delta are cutting capacity and adjusting operations to cope with soaring fuel costs, which typically make up about 25% of their operating expenses, leading to higher fares and reduced flight options.
- Consumers are already experiencing rising airfares, with data showing month-over-month increases in March, a trend likely to continue as carriers pass on fuel cost increases ahead of the summer travel season.
- Wirth emphasized that global energy system flexibility is diminished due to depleted inventories, and even if energy flows resume, it may take time for supply chains to stabilize, prolonging aviation sector challenges.
