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Asian markets face the threat of aviation fuel shortages due to Middle East conflict
March 13th 2026
Australian Government Transport Minister Catherine King and Energy Minister Chris Bowen held talks with Qantas, Virgin Australia, and other members of the transport industry on Thursday, seeking to reassure them about fuel supplies in the face of the growing prospect of a critical fuel shortage, the Financial Review reported. Read More » On March 12, 2026, Sydney Airport chief executive Scott Charlton raised concerns about an over reliance on overseas supplies, following importers’ warnings that there can be no assurance airports will receive aviation fuel next month. Carlton said Australia’s biggest aviation hub, which consumes nearly 40% of the country’s aviation fuel, has a supply of 25 to 30 days held in pipelines and storage. "We don’t refine aviation fuel at scale anymore. We import it," Charlton told a biofuels conference, explaining that meant the reliability of that 25-day supply depended on international shipping lanes, global refining capacity, and geopolitical stability. Airports across Australia are supposed to hold a minimum of 27 days’ worth of jet fuel supplies. However, industry sources who sought anonymity because they were not permitted to speak publicly, told Financial Review there was significant uncertainty over how much fuel would be shipped to Australia in April, as refiners prioritized their own domestic fuel needs over exports.
The Vietnamese government warned that domestic fuel suppliers can guarantee deliveries only until the end of March. It said the suppliers have begun delaying shipments for various reasons and may invoke force majeure clauses. "The risk of a shortage of aviation fuel for Vietnamese airlines from April and in the following months is real," the government said in the statement. The Civil Aviation Authority of Vietnam (CAAV) has suggested a number of policy measures to reduce pressure on Vietnam’s aviation industry. These include a proposal to exempt 100% of the environmental protection tax on aviation fuel until the end of May, and to add aviation fuel to the list of goods eligible for a reduced value-added tax (VAT) from 10% to a lower appropriate rate. The CAAV also proposed allowing airlines to apply a fuel surcharge to domestic airfares, with a flexible adjustment mechanism tied to fluctuations in Jet A-1 fuel prices. It has also recommended reviewing and, if needed, adjusting the price cap on domestic air routes to help airlines maintain operations. The agency also proposed cutting certain aviation service fees by 50%, including landing and air navigation fees, similar to support measures implemented during the COVID-19 pandemic. CAAV proposed that the Ministry of Industry and Trade expand fuel supply sources and direct domestic refineries, such as Dung Quat Refinery and Nghi Son Refinery, to maximize Jet A-1 production capacity, according to a local media report.
Earlier this week, Taiwan’s Formosa Petrochemical Corp (FPCC) issued a force majeure notice on some of its petrochemical supplies due to feedstock delivery delays stemming from shipping disruptions in the Strait of Hormuz. "Our No.2 and No.3 crackers are still operating at around 70% for now," FPCC spokesperson KY Lin said, adding that the refiner is considering shutting one cracker if "naphtha feedstock does not come at all". For refined fuel products such as diesel, jet fuel, and gasoline, the company is still proceeding with its export deliveries for March and April, although there is likely to be no spot availability for April, Lin said.
