Airlines still face fuel shortages, route chaos despite Hormuz reopening

The global airline industry continues to grapple with fuel supply constraints and network disruptions tied to the Middle East conflict, even as diplomatic progress offers a glimmer of hope for recovery, according to Aviation Week.aviationweek

The report, published July 1 by Aviation Week correspondent Helen Massy-Beresford, noted that airlines are contending with ongoing jet fuel difficulties and route changes despite "stop-start efforts to bring an end to the conflict in the Middle East and reliably reopen the Strait of Hormuz for oil supplies to pass through."aviationweek

Diplomacy Advances, but Supply Chains Lag

The United States and Iran concluded a round of indirect talks in Doha on Wednesday focused on restoring maritime traffic through the Strait of Hormuz, Reuters reported. The discussions built on an interim ceasefire agreement announced in mid-June, when President Donald Trump declared the waterway would reopen for toll-free navigation. But sources familiar with the talks said negotiators made no breakthrough toward a lasting peace.reuters+1

Even before the ceasefire, IATA Director General Willie Walsh warned that restoring fuel supply would take months due to damage to Middle Eastern refining infrastructure. "If the strait were to reopen and remain accessible, it would still take several months to restore supply levels due to disruptions in refining capabilities in the region," Walsh said in April.reuters+1

Demand Falls as Carriers Adjust

IATA data released June 30 showed global air passenger demand fell 2.2% year-over-year in May 2026, driven by a 28.4% collapse in traffic among Middle Eastern carriers. Excluding the Middle East, demand grew 0.7%. The load factor hit a record high for May at 83.5%, reflecting aggressive capacity cuts.iata+1

Several major carriers remain in holding patterns. Air France suspended Tel Aviv flights until July 1 and Dubai and Beirut services until July 5. KLM suspended Riyadh flights, while some Japanese and Southeast Asian carriers pushed resumption dates into August. Gulf carriers including Emirates and Qatar Airways have moved faster to rebuild operations from their hubs.iraqinews+2

Uneven Recovery Ahead

The EU considered tapping strategic jet fuel reserves in June as supply concerns deepened ahead of peak summer travel. CNBC reported in April that Deutsche Bank ↗ 2.84% analysts projected non-U.S. airline capacity for flights to and from U.S. markets would decrease 2.3% year-over-year in the June quarter due to elevated fuel prices.euronews+1

While airspace across the Gulf has largely reopened, inconsistent schedules, partial restrictions over Iran and Iraq, and infrastructure damage in Kuwait continue to complicate the recovery. The airline industry slashed its 2026 profit forecast earlier this year, citing the fuel shock, and carriers face what one analyst described as a "backlog of about seven months post-ceasefire regarding the impact on sentiment".facebook+2