Kerosene crisis could slam the door on us: will Budapest Airport function this season? – updated

Demand for kerosene surges at every airport during peak season, but it is especially critical at Budapest, where limited storage capacity makes seamless supply from available sources a necessity. Optimism persists for now, yet the protracted Iranian war offers scant reassurance. Despite President Trump’s weeks-long talk of an imminent deal, the Iranians remain defiant – a stance that could derail the summer season, inflict heavy losses on airlines, and send ticket prices skyrocketing.

Airlines cancelling flights en masse due to kerosene shortages

Kerosene shortages have gripped parts of the world, forcing major carriers to slash services: in Asia, Vietnam Airlines, Vietjet Air, Bamboo Airways, and AirAsia; in North America, United Airlines and Air Canada; and in Oceania, Air New Zealand. AirAsia has already cut capacity by 10 per cent. According to a Business Insider compilation, European airlines are now following suit – KLM, Lufthansa, Edelweiss Air, Scandinavian Airlines, and Aer Lingus among them – as reported by Hungary’s G7 outlet, affiliated with Telex.

The culprit is unmistakably the Hormuz Strait closure, through which – despite assurances – cargo ships pass only sporadically. Iranian attacks struck several vessels today, while Iranian ports remain under American blockade. Meanwhile, talks in Islamabad between US and Iranian officials make little progress, notwithstanding the Trump administration’s bold claims.

Ryanair and Wizz Air next in the firing line?

The good news for Hungary is that no disruptions have yet materialised. Budapest Airport, along with the principal domestic players Ryanair and Wizz Air, confirm operations are proceeding to plan, with summer expansions intact. Yet aviation analytics firm Cirium has downgraded its global capacity forecast: from 4-6 per cent growth to a possible 3 per cent contraction.

László Madas, a judicial aviation operations expert, warns that “next-day” cancellations by Wizz Air and Ryanair are a realistic prospect, depending on how long the Middle East crisis drags on.

Does Budapest airport have enough kerosene?

Telex reports no immediate issues at Budapest, thanks to robust infrastructure, diverse sourcing options, and domestic production covering about 70 per cent of needs. MOL, Hungary’s refiner, exports none of this fuel. The remainder comes via imports, as it does for many EU states.

The Achilles’ heel is storage: tanks hold just 4-5 days’ worth. Hungary also maintains a strategic reserve of 13,000 tonnes – enough for one week.

Trouble looms only if imports halt, rapidly depleting reserves. Storage expansion is merely at the planning stage; Telex offers no details on boosting production.

Flights could still operate with scant fuel, albeit at reduced frequency. Airlines can reroute to avoid tanking up at shortage-hit airports.

Even so, expect sharp ticket price hikes – from fuel costs alone, never mind the shortages. Telex notes fares have already doubled in several markets.

Update: Petroleum association calls for professional consultations

Ensuring fuel supply and managing sudden price surges require uniform regulation and continuous professional consultations, the Hungarian Petroleum Association (MÁSZ) said on Wednesday.

MÁSZ said measures aimed at moderating rising fuel prices can only be effective if they affect the functioning of the market as a whole and the fundamental elements of the price structure.

Solutions are needed that can be applied uniformly, under the same conditions for all market participants, and do not disrupt the balance of competition. The review of tax and tax-like burdens can provide substantial, predictable and noticeable help, it added.

The association noted the difference between the market price and the government’s capped motor fuel price has increased to nearly HUF 65 per liter for petrol and to HUF 87 per liter for diesel. At such price levels, imports have gradually declined, while domestic supply increasingly relies on strategic reserves.

MÁSZ said the resumption of deliveries of Russian crude through the Druzhba pipeline will improve supply security but will not provide a solution to the drop in finished product imports.

Updated 2: Tourists wary of tensions in Middle East could pick Hungary as alternative destination

Travellers concerned by the tensions in the Middle East and the impact on air travel could pick Hungary among their alternative destinations, US-based payment processor Global Payments said on Wednesday. Travellers who forgo the Middle East and choose to visit alternative destinations could boost the number of tourists to Hungary by around 225,000, Global Payments said, based on bank card data. Those visitors could spend close to EUR 80 million in Hungary, it added.

If you missed our previous, travel-related articles:

Wizz Air reshapes Hungarian travel trends, opens new base in Italian city

Qatar Airways resumes flights to Budapest from the Middle East