It will take several months for the aviation sector to return to normal kerosene supplies and reduce hydrocarbon prices, even if the Strait of Hormuz is permanently reopened, the director general of the International Air Transport Association (IATA) warned today.
“I think it will take several more months to return to the necessary supply levels, given the disruptions in refining capacity in the Middle East, which is a critical link in the global supply of refined products,” Willie Walsh told a conference in Singapore.
Walsh’s comments came after the announcement of a two-week ceasefire agreed by the United States and Iran, with the expected reopening of the Strait of Hormuz, through which 20 percent of the world’s oil usually passes, and which has been virtually blocked since the conflict began.
“The announcement (of the ceasefire) has led to a very significant drop in crude oil prices,” which fell more than 15 percent today, but it will still take months to return to the desired level. “I don’t think it’s going to happen in a few weeks,” Walsh said.
Air travel is “a sector that can be profitable even with high oil prices. The problem is the short-term response to this rapid price increase,” he added.
