With 12,000 Flights Canceled In May Already, We’ve Got Bad News About Your Summer Vacation

The U.S. is now two months deep into an unprovoked war with Iran and the results have not been kind to anyone. In the states inflation tripled with surging gas prices, which quickly reached an average of over $4.00/gallon nationally. And in a world completely dependent on fuel, any shortage in the supply system hurts everyone, especially concerning air travel. It’s bad enough that Matt Smith, Kpler director of commodity research warned on CNBC’s “Squawk Box” that the 12,000 flights have been cancelled in May — of which we’re only five days in — was only the beginning. Expect jet fuel prices to affect your summer travel, or even cancel it. 

A little math goes a long way into explaining how this happened, and Smith did a good job giving us the highlights. On average, global jet fuel exports alone account for two billion barrels per day. At least, that’s what it should be when everything is up and running and there isn’t a war slowing any of that down. Right now, those global exports for jet fuel are 1.3 million barrels a day. The math comes out to a shortage of 35 percent of jet fuel production, daily. That’s not a blip. That’s not a fraction. That’s over a third of just jet fuel oil supply just not being produced or distributed around the world.

Without Middle East crude, Asian jet fuel production is suffering as refiners desperately try to meet domestic demand. “It is a series of dominos that are falling here,” Smith explained. “Jet is the first one to go. Asia is the first region, but it’s going to spread across the globe, and it’s going to spread across the products as well.”

The U.S. is paying for its actions as it pumps some of its own 16-17 million barrels of production a day into the global market. That also includes American-produced jet fuel making its way to Europe. Sure, American oil producers may see some nice payouts as jet fuel pricing surged 70-110% since the war in Iran started according to Barron’s, and but its at the cost of everyone else who needs to use it.

Jet fuel can account for as much as a quarter of an airlines travel costs, explaining why exponential rising fuel costs were the final nail in the coffin that is Spirit Airlines. Delta airlines announced they’ll begin cutting food and drink offerings on flights of less than 250 miles to offset fuel costs beginning May 19, and is one of among many airlines, as compiled by The Independent, already thinning out flight availability or increasing prices for baggage fees, tickets, fuel surcharges, etc., to make up even just a little bit of the difference.

Any further airline cancellations Smith said, will come to a couple of things: either prices get so out of control no one will buy them, or regions actually run out of jet fuel.

“This is something that is coming — it’s a slow-motion car crash and we’re just kinda sleepwalking through it.”