Matthew Dalton

Oil is crude oil.

That's what comes out of the ground.

Jet fuel is what's refined from crude oil, and it's transformed into jet fuel in huge factories that crack open the crude oil molecules, strip them down, clean them into something that can be put into a plane.

And the Persian Gulf, as it happens, supplies a lot of crude oil, but it also supplies a lot of jet fuel, refined jet fuel from refineries that are on the wrong side of the Strait of Hormuz right now.

So, you know, the impact on the industry has both been because crude oil has not been available from the Gulf.

It's also because jet fuel itself from refineries on the Persian Gulf has not been available.

Since the Strait of Hormuz has been closed due to the conflict, about 20% of the world's jet fuel has not been able to get to global markets and pass through the Strait of Hormuz.

And that has been a big problem for the jet fuel supply, for airlines.

China is a big importer of crude oil, but they are a huge refiner.

So they do actually end up exporting a lot of their jet fuel.

But since the crisis has started, they've been stopping exports and keeping production at home for their domestic airlines.

Well, I mean, in Asia, that's been a big problem for regional carriers.

Countries like Vietnam and Myanmar have had to slash operations.

In Pakistan, airlines have been told to fly in with as much fuel as possible.

so that they don't have to refuel much to take off again because the Pakistani authorities don't want to stress their jet fuel supplies.

So that's been a knock-on effect of China as well because China is such a big exporter in the region, or was.

And if they can't replace that crude, you know, in relatively short order, one of the things they would do is just like, you know, ramp down production, maybe not shut the entire refinery, but shut some units.

A few weeks ago, Europe's airport industry body warned that if the Strait of Hormuz did not open within the next three weeks, that shortages were a possibility in Europe.

The authorities have been doing things to monitor the flow of jet fuel around the continent and...

refiners have switched their dials to max jet fuel production mode.